Stoploss Techniques
Why 'Stop-loss' is important?
The chart pattern below is a Descending Triangle formed in the EURGBP pair on September 28th, 21 in the 30 minute time frame.
A Descending Triangle is a bearish chart pattern created in technical analysis by connecting a series of lower highs with one trend line and a series of lows with a second horizontal trend line.
Explanation :Forex pair : EURGBP Time frame : 30 min. (28 Sep'21) Pattern : Descending Triangle Signal : Descending Triangle. gives bearish signal Expectation : price will fall (↓) Position : Short Reality : appreciation in price (↑) Result : Stoploss hit (loss with 1:7 risk reward ratio) Lesson : Trade with confirmation (respect your stoploss, no revenge trading) Ideal entry : Breakout & Retest, when support become resistance
The trade, as shown in the chart, goes against your strategy. To protect your capital, you must use a technique known as stop-loss.
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