forex for dummies

In Forex trading,stop loss is not a great tool or technique for many traders as it requires taking necessary losses, calculate risks and foresee price turns. However, such money management tool in hands of a knowledgeable trader becomes rather a powerful trading weapon than a tool of disappointment and painful losses. There are several method we can apply stop-loss when start trading

Simple equity Stop
According to this rule, a trader would place an order and based on a lot size would calculate amount of pips required to reach the limit of 2-3% of the total account balance (and a stop loss will be placed at that point).

Chart based Stop
There are many approaches to placing protective stops using a chart based stops: stops based on swings high / low, stops using trend lines, fibonacci related stops and so on.

Margin Stop
first, the trader should divide his account into several equal pieces to ensure that the whole capital will not be blown off in one shot.Supposing that a trader plans to spend 15 000 USD, it is suggested that the account opened with a broker "weights" between 1000 to 2000 USD.