There’s a big claim by some “famous” Forex traders recently that’s been stirring up more than a little controversy in the Forex forums. They’ve said that “Real traders don’t use stop loss orders”, and garnered a lot of attention from beginner Forex traders in particular. Today, if you’re just getting started in Forex, should you abandon stop loss orders altogether? By the end of this article, you’ll know the truth behind these big claims, and the lessons you can learn to make yourself a better trader.
Do Real Forex Traders Use Stop Loss Orders?
So do “Real traders” use stop loss orders? I know quite a few of them that do. Now, some of them might place them into the market as standing orders, and some of them might use a “mental stop”. Regardless of how they do it, all of the top Forex traders I know have a “get out” point, and so should you. I believe that whoever said that “Real traders don’t use stop loss orders” meant to say that they tend not to place a standing order like most beginner Forex traders would.
Forex traders that trade large positions tend to be very secretive about their stop points, because they don’t want to allow market makers or brokers to hunt their stops. That said, they have junior traders monitoring their positions around the clock who are always ready to get them out of the trade once the stop is hit. That doesn’t mean that anyone getting started in Forex should do the same thing, because the difference between beginner Forex traders and expert Forex traders in terms of experience and discipline is huge.
Don’t Try This At Home If You’re Learning To Trade Forex!
Just because expert Forex traders don’t place a standing stop loss order with their broker doesn’t mean that you shouldn’t as well. When you’re just getting started in Forex, you won’t have the time to operate a mental stop. It’s also a very dangerous practice when you’re learning to trade Forex, because even the slightest hesitation can put you in a world of trouble. The dangers of stop hunting at this stage is far less than the risk of emotional trading mistakes.
When you’re getting started in Forex, you need to have a lot of structure to assist you in learning to trade Forex with discipline. It’s essential to trade with a proven, profitable Forex trading system, and to place all of your stop and limit orders into the market. By creating an environment that fosters trading discipline and emotional self control, you’ll be able to learn how to trade Forex safely and profitably in the years to come.