This Simple Trick Can Help Protect Your Capital

Markets don’t always move the way you expect. A stop-loss helps you control risk, protect your account and keep your emotions in check, especially when things get volatile.

If you’re scared to lose money in trading, then you need to understand what this statement means.

Always consider setting your stop loss. And here’s why.

A stop loss is simply a pre-set price where your trade automatically closes if the market moves against you.

So, let’s say you buy euro/dollar at 1.100. You set your stop loss at 1.095. So, if the price drops to 1.095, your stop loss will trigger to close at the next available price. So, what does all of this really mean?

So, without a stop loss, there’s a lot more manual intervention needed to manage the risk. But with a stop loss, that’s all automated for you. So, I guess it’s like wearing a seatbelt. You hope you never really need it, but when you do, it’s there to save your account or your life.

And always remember, good traders don’t just aim for profits, they also manage their capital risk.