>>>A wise trader puts his stop at a level where he has to assume that the trend is going to be broken, according to what the indicators tell him is possible or probable. Usually, this would be a broken trendline in the time frame he’s trading in, or a support level which gets broken.
>>>It’s also important not to set the stop loss too tight, as the current volatility could execute it without reason. A price has to have the opportunity to move around the entry within a certain range. It is common for this to be at least as far as 1.5 times the current high-to-low range.
>>>This will often be right, but sometimes not. Price can move back over the trendline unexpectedly and go on within the trend, but more often it won’t. Especially not immediately. When having been stopped out, you always have the opportunity to go back in. But in a case where price movement keeps reversing, the smart trader’s capital has been saved.
Topic: Choosing a suitable level for the Stop Loss (Read 113 times)
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