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Talking about stop losses is one of those less popular subjects. No one likes to dwell on trades that are going south!
But, statistically speaking, around 40% of the trades that successful traders make are not going to work out. Even among unsuccessful forex traders, usually, their issue is that their losing trades are bigger than their gaining trades.
The trick to successful trading is minimizing drawdowns. And, in many cases, the distinction between success and failure is money management, in which stop losses play a pivotal role. Beyond simply providing the safety that a trade won’t run away on you while you’re not looking, having loss management as an integral part of your trading strategy might be precisely how you get the most out of the markets.
It’s Not Just the Size That Matters
Many beginner traders start with a single fixed rule for their stop losses. A good one is to set a maximum loss on yo...
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