Stop Loss Strategies For Beginners 🧵👇
ThiccTeddy@ThiccTeddy
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Mar 31, 2024
~3 min read
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Stop Loss Strategies For Beginners
🧵👇
🧵👇
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Having a stop loss strategy is incredibly important for ALL traders. They protect you from more downside and ensure that you don't allow emotions to control your trade
Without one it's easy to average down on losers and take MASSIVE losses
Without one it's easy to average down on losers and take MASSIVE losses
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Stop Loss Definition
A stop loss is a sale order placed below the current price. These orders protect the trader from further downside
A stop loss is a sale order placed below the current price. These orders protect the trader from further downside
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Before we get into exact strategies... LIKE AND REPOST THIS ENTIRE THREAD
Education is king baby♥️🔁
Education is king baby♥️🔁
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Stop Loss Strategies
1) Strict %
2) Key Levels
3) Trailing
4) My Stop Loss Strat
These are the main 4 we will be talking about today. There are other effective strategies, but I don't want to recommend them for beginners
1) Strict %
2) Key Levels
3) Trailing
4) My Stop Loss Strat
These are the main 4 we will be talking about today. There are other effective strategies, but I don't want to recommend them for beginners
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Strict % Stop Loss
This strategy includes choosing a % loss per position and sticking to it EVERY SINGLE POSITION
10, 15, 20, & 25 are common percentages traders will use depending on their strategy and risk tolerance
This strategy includes choosing a % loss per position and sticking to it EVERY SINGLE POSITION
10, 15, 20, & 25 are common percentages traders will use depending on their strategy and risk tolerance
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This is the strategy I always recommend to beginners. It builds discipline and forces you to follow the trade plan, which is a great habit to have
It also encourages letting your stop loss hit and then RE ENTERING. YOU CAN RE ENTER
It also encourages letting your stop loss hit and then RE ENTERING. YOU CAN RE ENTER
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Key Level Stop Losses
This strategy includes finding a key level, entering near it, and setting a stop loss right below that level
This strategy is popular because if a key level breaks, it is likely to lead to more downside
This strategy includes finding a key level, entering near it, and setting a stop loss right below that level
This strategy is popular because if a key level breaks, it is likely to lead to more downside
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This strategy is great because it keeps your stops tight and they are found using REAL DATA not just a random % that has no correlation to the chart/price
The downside of this strategy is often price will wick below the support and fill your stop loss before bouncing
The downside of this strategy is often price will wick below the support and fill your stop loss before bouncing
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Trailing Stop Losses
A trailing stop will follow the price a fixed amount and trigger if price dips that amount
This is a popular tool to help maximize profit
A trailing stop will follow the price a fixed amount and trigger if price dips that amount
This is a popular tool to help maximize profit
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Trailing stop losses are great if you are trading a less volatile vehicle, or looking to maximize profit
Trailing stops have been known to not execute on volatile moves, so keep that in mind while using them
Trailing stops have been known to not execute on volatile moves, so keep that in mind while using them
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My Stop Loss Strategy
DISCLAIMER: my stop loss strategy can be easily impacted by emotions, so if you struggle with discipline this isn't for you
DISCLAIMER: my stop loss strategy can be easily impacted by emotions, so if you struggle with discipline this isn't for you
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My Stop Loss Strategy
I find a key level to place my stop loss below AND wait for a candle to close below that level to stop out
This can lead to larger losses due to waiting for the candle to close, but it also protects you from stop loss raids
I find a key level to place my stop loss below AND wait for a candle to close below that level to stop out
This can lead to larger losses due to waiting for the candle to close, but it also protects you from stop loss raids
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In the example above you can see that my stop loss level was placed right below previous lows. That level was breached right after entry, but the candle closed above my stop loss level
I would have avoided the stop loss raid and caught the move
I would have avoided the stop loss raid and caught the move
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This is a form of 'mental stop loss'
I really really really discourage it unless you are watching the screen for the entire trade AND have a firm grip on your emotions
I happen to have good control of my emotions, so it works well for me
I really really really discourage it unless you are watching the screen for the entire trade AND have a firm grip on your emotions
I happen to have good control of my emotions, so it works well for me
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I also implement a form of a trailing stop loss
Once my trade is +10% I place my stop loss at even which ensures I don't allow that trade to flip red
This was one of the things that helped me turn the corner when I was trying to get profitable
Once my trade is +10% I place my stop loss at even which ensures I don't allow that trade to flip red
This was one of the things that helped me turn the corner when I was trying to get profitable
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My 2 cents
-Always have a stop loss strategy IT IS A NON-NEGOTIABLE
-Beginners should use a hard stop for every trade
-You can always add a trailing stop loss once your position is green
-RESPECT YOUR STOP LOSSES. THEY ARE USELESS IF YOU CANCEL THEM & AVERAGE DOWN INSTEAD
-Always have a stop loss strategy IT IS A NON-NEGOTIABLE
-Beginners should use a hard stop for every trade
-You can always add a trailing stop loss once your position is green
-RESPECT YOUR STOP LOSSES. THEY ARE USELESS IF YOU CANCEL THEM & AVERAGE DOWN INSTEAD
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I hope this thread helped you understand stop losses🙏
If you want to join my trading family, click the link in my bio and live trade with us!!
If you want to join my trading family, click the link in my bio and live trade with us!!
