April 28, 2024 • 7 mins
I Don’t Know Where to Place my Stop Loss Podcast: Signup For my Forex Masterclass Find out more about Blueberry Markets – Click Here Find out more about my Online Video Forex Course Book a Call with Andrew or one of his team now Click Here to Watch Prop Firm Masterclass Click Here to Download my Lot Size Calculator #545: I Don’t Know Where to Place my Stop Loss In this video: 00:27 – Where should I place my stop loss? 01:18 – This is what most people do – and it’s wrong. 02:44 – Use support and resistance levels. 03:20 – Always look at round numbers. 04:22 – How big is your stop loss? 06:14 – Attend my Masterclass, Prop Firm webinar and book a call with us. 06:37 – Trade through Blueberry Markets. Andrew. I don't know where to put my stop loss. Can you please help me? If that sounds like you. Listen up. I've got some great information for you. Let's get into it right now. Hey there, traders! This is Andrew Mitchem here with video and podcast number 545. Where should I place my stop loss? Now, I don't know where to place my stop loss. It's a question and a comment that I get all of the time. And it must be something that frustrates so many people because they just don't know where to put their stop loss. Why to put it at a certain level? And so it creates confusion, frustration, and inevitably leads to losing trades and therefore overall a losing trading performance. Now, unfortunately, most people out there just don't know where to put their stop loss because they don't understand the market or they don't understand what is happening at that time. They don't realize there's a difference between different currency pairs in terms of the amount of movement or different time frame charts or different times of the day, volatility at the time. All these things make a big difference and it's something that you need to consider when placing a stop loss. This is what most people do – and it’s wrong. Now, unfortunately, most people out there who learned to trade through, let's say, watching some YouTube videos or a few forum sites, they unfortunately make the common mistake of putting their stop loss X number of pips away from the entry price. Why they do that? Well, that's what most people tell you you should do. It makes it easier, I suppose. You go, I'm putting this stop loss at 20 pips away. Well, what on earth this 20 pips mean? It's completely and utterly irrelevant. You know, 20 pips if you're trading the EUR/CHF is massively different to 20 pips if you're trading the EUR/NZD as an example. You know, one doesn't move hardly anything. Daily range of maybe, you know, 40 pips, the other one moves a lot. Average daily range of 100, 150 200 pips is vastly different. It also depends on what time frame you're trading, what time frame chart you are trading, because you know that will determine how big a movement is likely to happen at that time in the next timeframe candle. Use support and resistance levels. You know, because sometimes the market's very quiet. Other times it's moving a lot. Obviously, if you're trading on, let's say, a 4, 6, 8, 12 hour, Daily, you know, it's going to be a lot bigger candle than if you're trading on a 15 minute chart, for example. And so you have to take this into account also. Now, you also need to take into account and things that we do is a support and resistance level is a pivot point in a previous swing, high swing lows and making sure you're using as many factors as you can to put your stop loss behind that level. So if you're taking a buy trade, for example, you want to put your stop loss below several factors of safety to give yourself the best chance that the market may fall back towards your stop loss, but it's not going to take you out. And then it changes and goes up into your anticipated direction and you get a profitable trade. Always look at round numbers.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Andrew, I don't know where toput my stop loss. Can you please
help me? If that sounds likeyou, listen up. We've got some
great information for you. Let's getinto it right now. Hey, the
(00:20):
Traders is Andrew Mitcham here with videopodcast number five hundred and forty five.
Now, I don't know where toplace my stop loss. It's a question
on a comment that I get allof the time, and it must be
something that frustrates so many people becausethey just don't know where to put their
stop loss, why to put itat a certain level, and so it
(00:42):
creates confusion, frustration, and itinevitably leads to losing trades in therefore overall
a losing trading performance. Now,unfortunately, most people out there just don't
know where to put their stop lossbecause they don't understand the market, or
they don't understand what's happening at thattime. They don't realize there's a difference
(01:03):
between different currency pairs in terms ofthe amount of movement, or different timeframe
charts or different times of the day, volatility at the time. All these
things make a big difference, andit's something that you need to consider when
placing your stop loss. Now,Unfortunately, most people are out there who
you learn to trade through, let'ssay, watching some YouTube videos or a
(01:25):
few forum sights. They unfortunately makethe common mistake of putting their stop loss
X number of pips away from theentry price. Why they do that,
Well, that's what most people tellyou you should do. It makes it
easy. I suppose you go,oh, I'm putting this stop loss at
twenty pips away. Well, whaton earth does twenty pips mean? It's
(01:45):
completely and utterly irrelevant. You know, twenty pips if you're trading the euro
franc is massively difference to twenty pipsif you're trading the euro New Zealand dollar
as an example, you know,one doesn't move hardly anything daily range of
maybe you know, forty pips.The other one moves a lot average daily
range of one hundred, one hundredand fifty two hundred pips. You know,
(02:07):
it is vastly different. It alsodepends on what time frame you're trading,
what time frame chart you're trading,because you know that will determine how
bigger movement is likely to happen atthat time. In the next time frame,
Candle, you know, because sometimesthe market's very quiet, other times
it's moving a lot. Obviously,if you're trading on let's say a four
(02:30):
hour, six, eight, twelvehour daily, you know it's going to
be a lot bigger candle than ifyou're trading on a fifteen minute chart,
for example, and so you haveto take this into account. Also,
now you also need to take intoaccount and things like we do, is
a supporting resistance level. It's apivot point, you know, previous swing
(02:52):
highs, swing lows, and makingsure you're using as many factors as you
can to put your stop loss behindthat level. So if you're taking a
by trade, for example, youwant to put your stop loss below several
factors of safety to give yourself thebest chance. Though the market may fall
back towards your stop loss, butit's not going to take you out,
(03:14):
and then it changes and goes upinto your anticipated direction and you get a
profitable trade. Another thing that weuse, and you'd have heard me talking
about this multiple times, I thinkcalled rand numbers. Now, a rand
number to me is a level thatends in five zero or especially zero zero,
that is a very strong psychological level. Have a look at your chance.
(03:35):
You will find that the price banceis at those levels just so often
it's not funny. So if youhappen to have a trade that has a
stop loss that you can put ona by trade again below one of those
rand numbers, then even better becausethe likelihood is the price may come back
towards that rand number, Test thatlevel, and then move up keeping your
stop loss below that level. Thatrand number adds another factor, another layer
(03:59):
of safety your trade, and anotherlayer of probability that the market will not
come down stop you at And youknow, how often do you see trades
that you go to look at themin hindsight and they just stop you out
and then they change and hit yourprofit target you know, a few bars
later. How frustrating is that?And I'm sure you've experienced lots of occasions
(04:19):
when that happens. So once youhave your stop loss area in place or
the level you need, you thenneed to calculate, this is the only
time you really need to use pips, how far away that is from your
entry price, whether you're using amarket order or a stop order or a
limit order, how far away isthat stop loss from the price that you
are entering the market. Therefore,you then need to know that number,
(04:42):
because therefore you can then go,well, and I've got a lot size
calculator script that does that simply.You then work out the lot size or
the position size you need for thattrade according to the stop loss of that
trade. And it's also according toa few other things. One, it's
the pair that you're trading, becausedifferent pairs pay different amounts per pip of
movement. It also is determining byyour account size and the denomination of your
(05:09):
account. If your accounts in Britishpans, it's going to be a different
number than if your accounts in NewZealand dollars or US dollars, for example.
So you've got to know all thatin order to calculate your risk size.
Now all that sounds potentially a littlebit complicated and confusing, and you
go, oh, that's just toohard angel, No, not at all.
It's simple, and it just takesliterally like a number of a few
(05:30):
seconds to drag the script on.I'll put a link to it, by
the way. See if you don'thave it, you can use it on
empty four, empty five. Youliterally drag the script on. My script
knows what your account size is,what your denomination is you're dragging it on
to the chart that you're about totrade, so it knows what pay you're
trading. We literally do is saythis is the risk I want half a
one percent or quarter or two percent, whatever it is you want to risk,
(05:55):
This is the stop lost size.It will tell you the exact lot
size needed. Really simple way ofkeeping all your losses low and controlled and
equal. So understanding stop losses,where to put them, wide to put
them is crucially important for your tradingsuccess. Now a couple other things out
there. If you have not beenon my master class, I really encourage
(06:15):
you to do so. It's aone hour long masterclass just goes through all
the different things that we look atas traders and how we can help you.
If you've not been on my propFirm master class. That is also
something. If you're out the lookingat prop firms, then you want to
know how to past prop firms easier. Then you can look at that again.
I'll put link if you are outthere looking for a fantastic broker to
(06:40):
deal with. This is for prettymuch everybody apart from a few countries and
the US, but for everybody else, have a look at Blueberry Markets.
Great brokerage, great platform, greatpeople, lots and lots of markets,
especially on their empty five platform.And again I'll put a link to Blueberry
Markets here as well, so Ihope that helps understand stop losses are massively
(07:00):
important. I look forward to bringingin more trading tips and information this time
next week. If you're on YouTube, like and subscribe or feel free to
share the video. And if youever have any topics or questions for me,
please feel free to email me directlyand I read everything that I get
sent to me. Andrew at TheforestTrading Coach dot com. See you next
(07:21):
week. Buy Finett
Andrew, I don't know where toput my stop loss. Can you please
help me? If that sounds likeyou, listen up. We've got some
great information for you. Let's getinto it right now. Hey, the
(00:20):
Traders is Andrew Mitcham here with videopodcast number five hundred and forty five.
Now, I don't know where toplace my stop loss. It's a question
on a comment that I get allof the time, and it must be
something that frustrates so many people becausethey just don't know where to put their
stop loss, why to put itat a certain level, and so it
(00:42):
creates confusion, frustration, and itinevitably leads to losing trades in therefore overall
a losing trading performance. Now,unfortunately, most people out there just don't
know where to put their stop lossbecause they don't understand the market, or
they don't understand what's happening at thattime. They don't realize there's a difference
(01:03):
between different currency pairs in terms ofthe amount of movement, or different timeframe
charts or different times of the day, volatility at the time. All these
things make a big difference, andit's something that you need to consider when
placing your stop loss. Now,Unfortunately, most people are out there who
you learn to trade through, let'ssay, watching some YouTube videos or a
(01:25):
few forum sights. They unfortunately makethe common mistake of putting their stop loss
X number of pips away from theentry price. Why they do that,
Well, that's what most people tellyou you should do. It makes it
easy. I suppose you go,oh, I'm putting this stop loss at
twenty pips away. Well, whaton earth does twenty pips mean? It's
(01:45):
completely and utterly irrelevant. You know, twenty pips if you're trading the euro
franc is massively difference to twenty pipsif you're trading the euro New Zealand dollar
as an example, you know,one doesn't move hardly anything daily range of
maybe you know, forty pips.The other one moves a lot average daily
range of one hundred, one hundredand fifty two hundred pips. You know,
(02:07):
it is vastly different. It alsodepends on what time frame you're trading,
what time frame chart you're trading,because you know that will determine how
bigger movement is likely to happen atthat time. In the next time frame,
Candle, you know, because sometimesthe market's very quiet, other times
it's moving a lot. Obviously,if you're trading on let's say a four
(02:30):
hour, six, eight, twelvehour daily, you know it's going to
be a lot bigger candle than ifyou're trading on a fifteen minute chart,
for example, and so you haveto take this into account. Also,
now you also need to take intoaccount and things like we do, is
a supporting resistance level. It's apivot point, you know, previous swing
(02:52):
highs, swing lows, and makingsure you're using as many factors as you
can to put your stop loss behindthat level. So if you're taking a
by trade, for example, youwant to put your stop loss below several
factors of safety to give yourself thebest chance. Though the market may fall
back towards your stop loss, butit's not going to take you out,
(03:14):
and then it changes and goes upinto your anticipated direction and you get a
profitable trade. Another thing that weuse, and you'd have heard me talking
about this multiple times, I thinkcalled rand numbers. Now, a rand
number to me is a level thatends in five zero or especially zero zero,
that is a very strong psychological level. Have a look at your chance.
(03:35):
You will find that the price banceis at those levels just so often
it's not funny. So if youhappen to have a trade that has a
stop loss that you can put ona by trade again below one of those
rand numbers, then even better becausethe likelihood is the price may come back
towards that rand number, Test thatlevel, and then move up keeping your
stop loss below that level. Thatrand number adds another factor, another layer
(03:59):
of safety your trade, and anotherlayer of probability that the market will not
come down stop you at And youknow, how often do you see trades
that you go to look at themin hindsight and they just stop you out
and then they change and hit yourprofit target you know, a few bars
later. How frustrating is that?And I'm sure you've experienced lots of occasions
(04:19):
when that happens. So once youhave your stop loss area in place or
the level you need, you thenneed to calculate, this is the only
time you really need to use pips, how far away that is from your
entry price, whether you're using amarket order or a stop order or a
limit order, how far away isthat stop loss from the price that you
are entering the market. Therefore,you then need to know that number,
(04:42):
because therefore you can then go,well, and I've got a lot size
calculator script that does that simply.You then work out the lot size or
the position size you need for thattrade according to the stop loss of that
trade. And it's also according toa few other things. One, it's
the pair that you're trading, becausedifferent pairs pay different amounts per pip of
movement. It also is determining byyour account size and the denomination of your
(05:09):
account. If your accounts in Britishpans, it's going to be a different
number than if your accounts in NewZealand dollars or US dollars, for example.
So you've got to know all thatin order to calculate your risk size.
Now all that sounds potentially a littlebit complicated and confusing, and you
go, oh, that's just toohard angel, No, not at all.
It's simple, and it just takesliterally like a number of a few
(05:30):
seconds to drag the script on.I'll put a link to it, by
the way. See if you don'thave it, you can use it on
empty four, empty five. Youliterally drag the script on. My script
knows what your account size is,what your denomination is you're dragging it on
to the chart that you're about totrade, so it knows what pay you're
trading. We literally do is saythis is the risk I want half a
one percent or quarter or two percent, whatever it is you want to risk,
(05:55):
This is the stop lost size.It will tell you the exact lot
size needed. Really simple way ofkeeping all your losses low and controlled and
equal. So understanding stop losses,where to put them, wide to put
them is crucially important for your tradingsuccess. Now a couple other things out
there. If you have not beenon my master class, I really encourage
(06:15):
you to do so. It's aone hour long masterclass just goes through all
the different things that we look atas traders and how we can help you.
If you've not been on my propFirm master class. That is also
something. If you're out the lookingat prop firms, then you want to
know how to past prop firms easier. Then you can look at that again.
I'll put link if you are outthere looking for a fantastic broker to
(06:40):
deal with. This is for prettymuch everybody apart from a few countries and
the US, but for everybody else, have a look at Blueberry Markets.
Great brokerage, great platform, greatpeople, lots and lots of markets,
especially on their empty five platform.And again I'll put a link to Blueberry
Markets here as well, so Ihope that helps understand stop losses are massively
(07:00):
important. I look forward to bringingin more trading tips and information this time
next week. If you're on YouTube, like and subscribe or feel free to
share the video. And if youever have any topics or questions for me,
please feel free to email me directlyand I read everything that I get
sent to me. Andrew at TheforestTrading Coach dot com. See you next
(07:21):
week. Buy Finett
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