Stop Loss is often seen as a powerful weapon at the trader's disposal. However, almost everyone has gone through situations where Stop Loss behaved is like a trap.In this article we will analyze these two perspectives that we can give to the use of Stop Loss and with practical examples of its application in JForex.
The Stop Loss
For those who are more familiar with this terminology, a Stop Loss is a negative order instruction that closing our main order. In this context a Stop Loss means a closing order when the market goes against us and forces us to take losses.
It may seem strange and counterproductive that we are closing our order while losing. Why we not wait for the order to be positive and then close the order. This rationale is logical, the problem is when our order does not stay positive and is losing more and more and the use of Stop Loss would have been advantageous.
However, we also have cases where the market fluctuates rapidly and our Stop Loss has been activated, causing losses if we did not have Stop Loss there, our order had a positive result.
Traders sometimes complain that it seems the market was even at the price where our Stop Loss was placed. H…
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