In a futures operation, the Stop Loss (SL) is designed to limit your losses, but you can make adjustments to avoid being stopped out unnecessarily. Here’s a simple explanation:
1. Understand margin and leverage:
Margin: This is the money you have available in your account to cover price fluctuations.
If you increase the margin (adding more funds to the operation), you can avoid being liquidated quickly, but it does not automatically change the SL level.
Leverage: The higher the leverage, the closer your SL will be because you need less margin to open the operation.
2. Modify the Stop Loss:
Widen the SL range: You can move the SL further away from the current price, but this means taking on more risk (i.e., accepting greater losses if the market moves against you).
Make sure to do this based on analysis, such as key support/resistance levels.
3. Adjust your margin:
If you are close to your SL, you can add more margin to the operation (if your platform allows it) to give yourself more "wiggle room" so that the price has to move more before reaching it.
This is done by depositing more funds into the open operation.
4. Other strategies:
Do not use a SL that is too tight: Place your SL at a level that makes technical sense, such as behind an important support/resistance.
Use an appropriate position size: If your position is too large for your capital, the SL will be very close and will easily trigger. Reduce your position size so that the SL has more room.
5. Risk of moving the SL:
If you constantly move the SL or distance it without a plan, you could end up with greater losses than you expected. Use this strategy only if you have solid analysis.
If you do not understand this or do not plan to use it, it is better to trade in SPOT so you do not lose money.