Stop losses

This is a discussion on Stop losses within the First Steps forums, part of the Reception category; You place your stops using levels of support and resistance. if you were short you place your stop above a ...

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Old Jun 11, 2009, 3:05pm   #9
j m
Joined Apr 2009
You place your stops using levels of support and resistance. if you were short you place your stop above a level of resistance. If you were long you need to place it below a level of support.

Look 'Support' and 'Resistance' up on investopedia
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Old Jun 11, 2009, 3:56pm   #10
 
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Joined Jun 2009
Hi
I have a related spreadbetting question since most UK brokers I have looked at only seem to say stop losses are not guaranteed :

I only day trade so I can manage the closed market position ok but lets suppose there is a sudden big price change - say 100's or more clicks due to non-normal market conditions - (im told by my more experienced friends this can happen) - with no guaranteed stop losses are you likely to take the full hit of this or is it more the case you might close 1 or 2 clicks below your stop loss?

Anyone have experience of this kind of thing? Perhaps suffered a loss way above their stop loss?

Ive been trading a bit with play money and was now debating opening a real account but this potential risk has spooked me a bit! I need more info to assess the risk properly and of course the brokers dont do that, they just trot out the standard stop losses are not guaranteed line!

Cheers

Arron
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Old Jun 11, 2009, 4:27pm   #11
Joined Aug 2008
If your worried about gapping, trade with a broker like shortsandlongs or ODL limited risk account because there you get free guaranteed stops.
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Old Jun 11, 2009, 4:40pm   #12
j m
Joined Apr 2009
Quote:
Originally Posted by azzauk View Post
Hi
I have a related spreadbetting question since most UK brokers I have looked at only seem to say stop losses are not guaranteed :

I only day trade so I can manage the closed market position ok but lets suppose there is a sudden big price change - say 100's or more clicks due to non-normal market conditions - (im told by my more experienced friends this can happen) - with no guaranteed stop losses are you likely to take the full hit of this or is it more the case you might close 1 or 2 clicks below your stop loss?

Anyone have experience of this kind of thing? Perhaps suffered a loss way above their stop loss?

Ive been trading a bit with play money and was now debating opening a real account but this potential risk has spooked me a bit! I need more info to assess the risk properly and of course the brokers dont do that, they just trot out the standard stop losses are not guaranteed line!

Cheers

Arron

Depends on what you are trading and the size you are dealing with. Agree with above post. If you are just learning the game, using a spread betting company putting small trades on you can get guaranteed stops.

If one day you make it professionally then there are lots of stories of people losing big because there is no one on the other side of the market. I witnessed one of the worlds biggest traders get done two weeks ago for this in the vacinity of $170million.
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Old Jun 11, 2009, 6:00pm   #13
 
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Joined Jun 2009
Thanks

Quote:
Originally Posted by MikeYass View Post
If your worried about gapping, trade with a broker like shortsandlongs or ODL limited risk account because there you get free guaranteed stops.
Hey thanks for this, checked out shortsandlongs expecting to pay for the guaranteed stops in the spread but they are offering exactly the same spreads as the broker with no guaranteed stops!
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Old Jun 11, 2009, 6:09pm   #14
 
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Joined Jun 2009
browne1230 started this thread good stuff, thanks for that j m. Ive being doing alot of work on support/resistence. Gotta start looking at graphs as well as price movments now. baby steps I suppose........lost €70 of play money today, not the end of the world I suppose!

Last edited by browne1230; Jun 11, 2009 at 6:14pm.
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Old Jun 12, 2009, 7:33pm   #15
j m
Joined Apr 2009
Quote:
Originally Posted by browne1230 View Post
good stuff, thanks for that j m. Ive being doing alot of work on support/resistence. Gotta start looking at graphs as well as price movments now. baby steps I suppose........lost €70 of play money today, not the end of the world I suppose!
Pleasure mate,

Once you understand Supp/Res the next thing you need to take into consideration is the risk reward of your trading target compared to where you would place your stop.

This is because even the best traders are only right say 60% of the time so you need to ensure the trades which you are right on make more than the losers lose. Make sense?

Dont worry about the 70 today. Dont think of it as losing money if you get stopped out. "It is just the price of doing business." Just get pissed off when you break your rules and do stupid unnecessary ****

PM me if you need any advice or have any further questions to do with anything about trading
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Old Jun 13, 2009, 7:43pm   #16
Joined Nov 2008
Quote:
Originally Posted by j m View Post
You place your stops using levels of support and resistance. if you were short you place your stop above a level of resistance. If you were long you need to place it below a level of support.

Look 'Support' and 'Resistance' up on investopedia
Are you sure about it? You place your STOP there...market touches it and goes down again. Ever happened to anyone?

What is "resistance" in forex market? On one platform "resistance" will be at 1.4040 and at the other it will be 1.4045. Which resistance is "better"?

I would recommend putting STOP above/below important levels. such like 1.4050 in this case.
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