Stops

Discussion in 'Forex' started by jonathan734, May 27, 2009.

  1. nsideus

    nsideus

    This is very important. Make sure you have enough of a buffer between the support/resistance level and your stop. During low liquidity times, other traders may try to make a run on the areas where they think there are a large number of stops. The market will move to hit all the stops, then immediately reverse.

    This will be very frustrating if it happens to you when you are trading live. The market may eventually head in your direction but you're out of luck if your stop got taken out. This is one of the reason I only trade options now. I'm immune to whipsaws taking out my stops.

    Also consider the behavior of the pair you are trading. Something like the EUR/USD does not move like the more volatile GBP/JPY. You'll generally need much bigger stops to avoid whipsaws in the GBP/JPY.

    When I started in forex I traded primarily the GBP/JPY, but I wish I would've started with a pair that had less noise, like the EUR/USD or USD/JPY.

    You should also try opening a few demo accounts with other brokers to get a feel for the differences if you haven't already. Personally I don't think forex.com is a very good broker.
     
    #11     May 28, 2009

  2. Some real good issues were brought up -- I was always told that if you have good discipline and a good trading system, you will be a good trader! Still working on the discipline part - :)
     
    #12     May 28, 2009
  3. yes
     
    #13     May 28, 2009