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What is stop loss and take profit?

How to manage the position well?
فوریه 17, 2023
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فوریه 17, 2023

When you are talking to experienced traders, or it is better to say, amateur traders; Usually, they always complain that the market stops them and starts moving in the direction of their trend. On the other hand, once or twice when they did not leave a stop loss, they made a good profit. But in the end, for the third and fourth time, Cal Margin became an example of drinking water! 🙄

What do you think is best? If they don’t put a stop, they don’t follow capital management and simply call margin. On the other hand, if they put a stop, no matter how much they open their stop, they will still be stopped. We have to tell you that stopping is important. But there are two factors before that that can affect your final decision. The first topic is the optimal entry point and the second topic is market psychology. We will talk to you about this in the next sections.


What is stop loss and take profit?


In this article, we are going to teach you how to place a stop loss. But it is better to get acquainted with its nature. Yes, the common definition of a stop loss is where your loss ends. But you have to think smarter. Stop loss is where the market scenario changes. This is exactly where you can understand the Bezza mentality. Before you stop loss, think about whether this is where I should exit. Will the main scenario of the market change here?

If your answer to all the above questions is positive, no matter what strategy you have for trading. Your chances of winning will increase significantly. But if not, we have to tell you that opening your trade is no different from gambling. Because you will not have a suitable strategy for trading in both cases. This is why you need to think carefully about your stop zone. But the next thing you should pay attention to is that the tick profit strategy is different from the stop.

We should pay attention to two points when choosing where to cut our profits. The first point is, if the market continues this trend, how can we enter it. The second point is that if the market of our tick profit range or our profit withdrawal magnetizes or goes long, how should we record the reversal position. Finally, is it possible to manage our withdrawal stepwise or risk-free? In this case, you can record your feedback better.


How to place a stop loss in the forex market


If we want to start from the last stage giant, it will be a little difficult. But this issue can improve your market visibility. Let’s say you have a red downtrend line that you’re waiting to break. After suffering for a while, the price reaches a good place and returns. But your river point is activated when the downtrend line is broken. The downtrend line is broken and you activate your trigger using classic price action. When the new high is broken, you enter and place your stop below the previous level.

But very simply, you stop eating. What do you think is the cause of this issue, how can we manage this issue? You got caught up in the excitement of the market and realized that the market is in full force. On the other hand, you will not be allowed for a bigger stop because your capital management does not allow it. The best strategy at this time is to work in multi-time frames and wait a little while until the market excitement is exhausted. If you want to use the candlestick method, you might think that because we have had three strong bearish candles in a row.

The best thing to do is to get tuberculosis, but we have to tell you that this will not work either. Because you will stop again. You must wait for the pullback to your broken level to complete before logging in. Look at the image below. In the picture below, we waited for the stop price to hit all and then enter the position. We entered on the pullback to the broken surface below. On the other hand, our stop has not changed much and is almost a constant value. But as you can see, we have reached our third profit limit. This is the reward of those who are patient in their position.


How to put a stop in Binance?


You can also use the same strategy to place a stop in Binance. The first point is that you will have different charts to place stops. What we mean is that if you work in Binance futures market or any other exchange, your chart should be set to futures mode. The second thing you should pay attention to is whether your stop loss is in the place of other people’s stop loss.

When you build a liquidity pool with your stoplosses, the big exchanges usually drain it with draws. If you have a history of trading, you know exactly where your stop is and the market has started moving. Exactly you should place your position in these liquidity pools in the direction of the trend. Of course, keep in mind that your fear should not destroy your mind. But you should always move in a balanced way.

If you don’t think differently than others to place a stop, your stop will be lost. Consider that in the financial markets, usually between 92 and 95% of traders will fail. You have to have a different view of these people.


How to place a stop in the Iranian stock market?


You may know Iran Stock Exchange with its very smart actors. Note that the financial market is a zero-sum game. That is, if that actor is supposed to make a profit, you must lose somewhere. As a result, the behavior of this actor becomes more understandable for you. One of the reasons for the limited range of fluctuations in Iran is that the Iranian stock market usually has a very small volume.

As a result, the best tools to use for stopping are trend indicators such as parabolic SAR or Ichimoku. In this case, in addition to that, you have a moving stop. Your ability to manage capital is also greater.


final word


In this article, we answered the question of how to place a stop loss. If any part of this article was difficult or dumb for you. The best thing is to share with us in the comments section. Because all our focus is that you have a profitable strategy in the financial market.

As a final note, you will need to convert your rials to trade. We have put a live price board of digital currencies for you. With its help, you can have a suitable criterion for your transactions.