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Use a stop loss

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#1 ⇑ Haut ⇑ 06-09-2011 16:14:31

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Use a stop loss

One of the most important key to succeed on Forex is to use a stop loss (SL).

This morning gave us a perfect example of what could happen if you're not using any stop loss. Indeed, the SNB (Swiss National Central bank) intervenes on the forex to counter the increase of the swiss franc. As you may know, all pairs have moved strongly but the pair concerned by the Swiss Franc even more. Take a look at the chart below :

The pair takes 1000 pips in a few minutes. If you didn't set a stop loss at this time (and if of course you were on the wrong side on your trade), i think your account will be close to 0 with this king of movement.

Stop loss are good to well manage your risk but also to proctect you against unpredictable events...

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    Use a stop loss

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