Hi guys, this may be the most stupidest question lol…but I don’t understand How one gets ‘stopped out’? Can you not just hold onto the currency until it reaches a profitable price, then you exit the trade?
Cryptos for example allow you to hold onto the coins until you chose to sell.
Hope I’ve explained the question properly. Thanks
Are you trading FX? or are you just starting out and learning?
I’m still learning with a view to trade FX for real.
Well firstly suggest you go to the education section on here if your not already, in FX trading a stop loss is your safety net, bit like a trapeze artist if your trade goes against you then hit the safety net and not the floor, without it if you hit the floor you’ve either severely damaged your funds or even lost them totally.
FX markets can move rapidly in either direction if it’s going with you happy days, if not then hitting your stop loss means stopped out, always protect your capital, learn that and you’ll be in trading for a long time.
Thanks for the reply. I think I used the wrong term I didnt mean ‘stopped out’ moreso Priced Out… if you know that eventually the currency Will eventually move back in the direction you want why not wait until that happens? instead of setting a stop loss stay in the trade until the market reverses in your favour. How do you lose money basically.
I’ve been using the education tutorials in here, I’m up to Fibonaci but during my lessons and demos this question keeps popping in my head.
Because of the time frame and size of your account, if we all waited for a trade to reverse it would be a simple game, remember when a trade is going against you your money is literally disappearing in front of your eyes and markets will reverse at some time your right, but when.
If your trade is going with you then you can use a trailing stop which follows the trade but will still stop you out if the trade turns against, but this is used to protect your profits.
Ahhh I see, got you. I guess the cryptocurrency game is slightly different…they’re constantly assuring crypto traders to ‘hold’ onto their coins (even on a steep decline in price) until it’s more favorable to sell… lots to learn.
Thanks for your help.
All I can say to that is have deep pockets , " The market will stay erratic longer than you can stay solvent"
Well, that depends on your goal. However, the market is ever-changing, you never know what will happen next.