Hello, I started a demo forex account and so far accumulated $400 profit. Now what i want to know is why do i need stop losses? i never used it but when i did i actually lose money. I use take profit once it hits a certain pip. So are stop losses necessary? If so why do i need to use them. Also im not sure if the take profit is the same as selling.
seems u are doing well with ur demo, i went live about a month ago. in my demo, i never used stop loss, and i carried that to my live trading.
well, now am deeply in the red 
u see, i cannot trace my losses to “no stops”…there were mainly fear of losing and not being able to take the heat. but it is important to say that stop losses helps u take ur mind off the trade since u’v already made up ur mind to loose that money and as such, use a proper MM the will curtail ur losses if u are wrong.
i’v started a new kind of strat. where i will involve stop losses and its now working for me so, my friend…use stops, they are not for sissies.
and yes, TP is selling or buying depending on ur initial entry.
Stop/Loss is a very important factor(if not the most important) when trading. You need it to limit your loss per trade should a trade goes the opposite way.
so true stop loss are very important, it is a little annoying when you are just beginning to trade as they seem to always kick you out of the trade, but what that probably means is that you are setting your risk to reward ratio too far ,as in you are holding out for higher profits with smaller stop loss.By not implementing stop loss you are hoping the market will always return in your favor which is not always the case
Stop loss’s are very important, a stop loss will preserve your capital when you are wrong. We as traders have to understand that we will never be %100 right, so using proper money management and setting stops are a very important part of trading. Another thing with stops you can’t set them to close to the price, financial markets don’t move in a straight line. The markets will always have knee jerk reactions, so if you set your stop to close to the price expect to be taken out. I have come to learn as a trader that the most important thing when trading is psychology and money management, you could have the best strategy in the world. Without those two things you will always fail, You need to set stops, you need money management (remember this rule if you want to be a successful trader) and you got to have the right mind frame to take loss’s and still be able to trade like you always trade.
i cover a lot of stuff in my thread My Live Charts - If anyone needs help its free ok - simple trading for simple people
Read more: 301 Moved Permanently
Congrats with your small profit. Well, stoploss is very important to safeguard your account, but the take profit is also a bit important as it defines your risk to reward ratio. The first thing i do after a place a trade is to set my stoploss.
your SL will stop kicking you out of trades less often once your entry strat improves
i lost a 5000 usd live accountin 2004 doing that…the market teaches you a lesson and gives you the bill, expensive lesson
A Demo account is a bit like practicing pick up lines on your sister. Personally i believe you learn faster and better with a live trade. You do a few trade with no stop losses in place and it looks easy, then you get a trade where your up $500 but you think this is going to be a good one, next it drops, $10 profit oops , you wait back up to $240, then back in the red , -$100,
-$250, -$670, -$890 oh dear , all of a sudden you freeze , panic sets in, what now? - $3600 ! oh oh !
finally you bail out at - $5831 !
Stop loss is very important and neccessary for you in any trading. Since Forex is very complicated and you have to limit your loss when the market is on the opposite way.
hehehehehehe
You are kidding right? Ive not seen many price ‘spikes’ this year but when they happen you can kiss goodbye to a substantial slice of your capital. The price jumps, holds for the time it takes to use the bathroom and comes back again. You might survive but it means the past few days staring at the screen have been a waste of time.
Not using a stop-loss also suggests a lack of planning. No single trade should lose you more than 1-2% of your capital. The profit target should be at least double that. The worst you can do is set your stop-loss just below the preceding candles.
Sorry to sound harsh but if you have made profit then you have also been lucky and it wont last. Treat the money as though it belonged to someone else ( like the Mafia ) and they WILL be collecting ( You want to keep your knees…right? ).
KA -CHING… try and trade with incorrect position size for your tarding bank and ur stop will get hit everytime … trade small …set wide stop … win a few , etc etc you MUSt learn to step over puddles b4 you try to jump the creek … trade small be prpeared to lose …be prepared to win … dont look for winners everywhere , "it aint easy being green "
PS I aint a newbie … been at it for long time b4 I saw J .Fox and Niall fuller … lifes good
Stop losses will help prevent the worst from happening for example, losing your entire account on one trade, but they cant not protect you from price gaps in the market, which could once again result in you losing your entire account on one trade.
Q - are stop losses necessary?
A - Yes & no, it will depend on your character, personality, trading style & strategy.
You said right stop loss is helpful or not it depends on you need and practice . if you are good in trading and can deal instantly with changing market do not make use of stop loss. With less managed practice of trading stop loss may become an essential part of your trading that saves from big loss.
I am fairly new to trading but I have already seen some saves from using stop loss. The way I was trained it can’t hurt if the trade goes in your direction but if it turns on you it can cut your losses. After all, preservation of your account is the most important thing. If you run out of funds there are no trades. If just once some black swan flies into your trade you’ll be glad of the stop.
How can you have proper money management without using stop loss prevention. Without money management rules you are just giving away your money. I’ll gladly take it off your hands though 