Stop loss is the first protective order that limits a potential trade loss. It controls the price movement while you are away from the monitor and is triggered if there is an unexpected reversal or a false breakout.  In this case, the transaction is automatically closed.

Stop must be placed under any conditions, no matter what trading strategy you use. This should be remembered like ABC because in a volatile market it is often more important not to lose than to earn.

Stop loss can be set in different ways::

  • at a set timeframe minimum, if you buy;

  • at a set timeframe maximum, if you sell;

  • at the selling resistance level;

  • by indicators (on the Parabolic marker) when opening a buy order.

The first two ways are suitable for short and scalping. The last two - when trading with the trend.

If you set a stop loss, then you personally might have an unpleasant loss experience, but for your deposit that will definitely not be critical.