๐ฅ๐ฅ ๐๐ผ๐ ๐๐ผ ๐ฆ๐ฒ๐ ๐ฆ๐๐ผ๐ฝ ๐๐ผ๐๐๐ฒ๐ ๐๐ณ๐ณ๐ฒ๐ฐ๐๐ถ๐๐ฒ๐น๐โ๐ฎ๐ป๐ฑ ๐ช๐ต๐ ๐ฌ๐ผ๐๐ฟ๐ ๐๐ฒ๐ฒ๐ฝ๐ ๐๐ฒ๐๐๐ถ๐ป๐ด ๐๐ถ๐ ๐ฅ๐ฅ
A stop loss order is your safety net, limiting losses by closing trades when the market moves against you. But if your stop loss often triggers right before the market reverses, itโs likely placed in the wrong spot. Hereโs how to fix that and manage risk better.
Why Stop Losses Get Hit
Many traders place stops based only on how much theyโre willing to lose, not where the market might actually reverse. For example, if you set your stop loss on S&P 500 futures at 2,468 to cap your loss at $200, the market may hit that level and reverse right after, frustrating your efforts.
How to Place It Right
Identify the Marketโs Turning Points: If the trend shifts only below 2,466, set your stop slightly lower, around 2,464.75, to avoid getting caught in a quick dip.
Adjust Trade Size: If a smaller stop means too much risk, trade fewer contracts to stay within your limit. This gives you more room to place the stop correctly.
Key Takeaway
Itโs not just about minimizing lossesโitโs about managing risk wisely. By placing stops where trends actually shift and adjusting your trade size, you avoid unnecessary stop-outs. In trading, the focus should always be on staying in the game rather than chasing profits.
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