Stop loss using Fibonacci calculation is as important as knowing where a place to enter the market in taking an advantage, knowing where to put the stop loss is also very important. Maybe you can not enter the market based solely on Fibonacci levels without knowing where you will be out. Your account will expire and you will be forever blamed Fibonacci when trading without using stop loss, and will curse his name.
In the description of this time, you will learn about some of the techniques which you will put the stop loss. The first method is to put stop losses in the next Fibonacci level. If you are planning to enter the market at the Fibonacci 38.2% level, then you will put the stop loss level is exceeded by 50.0%. If you feel the level of 50.0% will be translucent, then you should put a stop loss level of 61.8% and so on.
If you have order at 50.0% then you can place a stop loss at the 61.8% Fibonacci level. The main reason is that you believe that at the rate of 50.0% will apply as a point of resistance. Therefore, if prices rise beyond this point, then you have the wrong estimate. Maybe prices have jumped, and to stop it, and you end up going toward your order earlier. It might be better if you are using this type of method for a short-term stop loss.
Now, if you want to be a little more secure, another way to set your stop loss is at the Swing High and Swing Low current. On this kind of stop loss placement which will give your business to allow more room to breathe and provide a better opportunity for the market to move in support of trade.
If the movement of the market price has exceeded Swing High or Swing Low, it means have shown that the reversal of a trend has occurred, and this means that you and your trading setup is void and that you are already too late to jump into the market. Set back a larger stop loss would probably be the best thing to use in the long run, swing trading, and you can also combine the stop loss is a method of “scaling in”, you’ll learn later on.
Of course, the larger stop loss, you also have to remember that in order to adjust your position size should be appropriate. If you tend to trade in lot sizes of the same position, then you may experience a loss. What do you think?