Using the stop loss is a very common practice in Forex. The new traders are taught to use the stop loss from the early stage of their careers since it protects their trading capital. To be honest, without learning to use the stop loss, you are not going to become a skilled trader in the Forex market. But do you think the new traders can set the stop loss at the desired price? The obvious answer is NO. They are using the stops too tight and eventually, the traders are getting knocked out from the market with a minor swing in the price. Let’s find some amazing ways by which we can avoid getting stopped out from this market.
Use the price action signals
Using the price action signals might seem to be very hard for the new traders. But this is by far one of the most efficient ways to place the stops in each trade. If you want to make big profits from this market, you must learn to trade with the reliable price action confirmation signals. The price action trading strategy is mostly used by professional or institutional traders. But the idea behind this system is very simple. Most of the trades are executed based on the simple price pattern. So learn to deal with the simple price pattern, if you want to protect your capital.
Trade with the Fibonacci tools
The Fibonacci retracement tool is most used by the skilled traders to find the potential reversal point. It’s not like the trend reversal trading strategy rather it is known as a trend continuation trading method. If you use the copy trading Australia service, you will realize the pro traders are also using the Fibonacci retracement tool to place the trade. The best thing about this tool is the use of stop loss. You won’t have to think about the stop-loss zone since 38.2%, 50% and 61.8% retracement level will act as the perfect stop-loss zone for each trade.
Avoid trading the news
One of the key reasons for which the trades are getting stopped out is trading during the news. Major news has a high impact on the price movement of the trading instrument. If you want to succeed at trading, make sure you are not trading the market in such major news. Look for the trade setups during the stable market condition so that you don’t have to worry about the false spikes. Things might be tough at the initial stage but once you learn to avoid the news, you won’t have to deal with a big loss and heavy slippage.
Avoid trading the breakout
The key reason for which some of the traders often get knocked out from the market is trading the breakout. Breaking trading strategy is extremely risky and requires extensive skills. Unless you learn to trade the major breakout with the help of the price action signals, you are not going to set the perfect stops. Either you will use wide stop or focus on the tight stops. But both of this approach results in a loss. At the initial stage, you should avoid trading the major breakout as it can result in a significant loss. Be a safe player so that you don’t have to trade with high risk.
Learn from your mistakes
No matter which strategy you use, some of the trades will hit stop loss and then the market with start to move in your favor. You should accept such losses and look for the next potential trade setups. But try to find the key reason for which you are losing money. Once you understand the key factors for losing the trades, you should think about fixing those issues. Solving the problems in your trading system makes you more confident and allows you to deal with the complicated price movement with more accuracy.