90% Traders use Stoploss but many of them don't know how to use it properly,
Everything you need to about deciding, placing and calculating a stop loss and position sizing..
A Thread🧵
In this thread, We will learn
1. Stop Loss placement.
2. Calculation of Stoploss.
3. Calculating Position Size.
4. Probably never get bankrupt trading.
We need a stop Loss to determine where should we cut or exit the trade.
We exit the trade because the price structure starts
showing an opposite move than we had anticipated and hence it should no longer make sense to ride in the opposite direction.
Stop Loss is to be placed at that area where the market structure has turned in the opposite direction
To illustrate, in an uptrend market as illustrated below, if the Low from which a new high is made, gets broken, we can assume that the market structure is broken and the trend has changed.
If the above scenario happens, an SL at the level which changes the mkt strctr is logical.
SL is necessary
1. To find the area where the MS might change and
hence it'll become illogical to keep a trade going whilst
market structure is pointing a move in the opposite direction.
2. To calculate the Position Size of the trade.
