Gold Spot / U.S. DollarEducation
Why Stop Losses ( SL) are everything !
Dear fellow traders,
In my journey of becoming a successful trader , I have learnt one very important rule. It is a core and basic rule of all trading. Please inscribe it into your mind like you would onto a rock with a nail. ALWAYS USE A STOP LOSS.
Why ? Let me tell you story of how all my money , burnt my accounts and sat on the cold hard floor why life was cruel to me. Life was not , in actual fact I was being cruel to myself by not using a stoploss.
Here is what happened , I entered a trade on Gold. Put in 200 USD. Shorted it because I thought heck , the bars look bearish the MACD is crossing , RSI was overbought what could go wrong. The best part ? I shorted with 7 microlots. You know what happened ? It went down as I thought then just spiked up like a firework on the 4th of July. It flew up so fast I couldn’t blink and my account got burnt in seconds. I traded on the news wrongly (1st mistake ). Left my trades open before strong news (2nd mistake ). Did NOT USE A STOP LOSS( BIGGEST MISTAKE). 4th was me not seeing the timeframe was 5mins , should have checked other time frames as well like 1 hour.
If I had put a stop loss with a calculated loss of 40 USD since I decided to go full margin (5th mistake ) with a high leverage of 1:500 ( 6th mistake ) , it would have saved me my balance equity. I would have 160 left , made a another trade on another day that would have been right and would have likely covered my losses ( pls do not trade thinking of covering your losses you will slip into gambling mode 7th mistake ). Do you see how important it is to use a Stop Loss ? It SAVES YOUR MONEY AND CUTS YOUR LOSSES. I know , you see it in -400USD , you think if you hold on longer , God will somehow make the market in your favour to +400 or at +50USD so you can close your trade and stop , guess what buddy you’re going to lose everything. When your heart starts pumping , you start panicking and you’re in the deep red , you know you screwed up. Instead of making it worse , CUT. YOUR. LOSS.
So how do you calculate your stop losses ? Tune in tomorrow for a new update of my educational posts on using a stop loss.
Thank you.
In my journey of becoming a successful trader , I have learnt one very important rule. It is a core and basic rule of all trading. Please inscribe it into your mind like you would onto a rock with a nail. ALWAYS USE A STOP LOSS.
Why ? Let me tell you story of how all my money , burnt my accounts and sat on the cold hard floor why life was cruel to me. Life was not , in actual fact I was being cruel to myself by not using a stoploss.
Here is what happened , I entered a trade on Gold. Put in 200 USD. Shorted it because I thought heck , the bars look bearish the MACD is crossing , RSI was overbought what could go wrong. The best part ? I shorted with 7 microlots. You know what happened ? It went down as I thought then just spiked up like a firework on the 4th of July. It flew up so fast I couldn’t blink and my account got burnt in seconds. I traded on the news wrongly (1st mistake ). Left my trades open before strong news (2nd mistake ). Did NOT USE A STOP LOSS( BIGGEST MISTAKE). 4th was me not seeing the timeframe was 5mins , should have checked other time frames as well like 1 hour.
If I had put a stop loss with a calculated loss of 40 USD since I decided to go full margin (5th mistake ) with a high leverage of 1:500 ( 6th mistake ) , it would have saved me my balance equity. I would have 160 left , made a another trade on another day that would have been right and would have likely covered my losses ( pls do not trade thinking of covering your losses you will slip into gambling mode 7th mistake ). Do you see how important it is to use a Stop Loss ? It SAVES YOUR MONEY AND CUTS YOUR LOSSES. I know , you see it in -400USD , you think if you hold on longer , God will somehow make the market in your favour to +400 or at +50USD so you can close your trade and stop , guess what buddy you’re going to lose everything. When your heart starts pumping , you start panicking and you’re in the deep red , you know you screwed up. Instead of making it worse , CUT. YOUR. LOSS.
So how do you calculate your stop losses ? Tune in tomorrow for a new update of my educational posts on using a stop loss.
Thank you.
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