Stop loss is a very important concept for foreign exchange gold traders. Some people say that trading must set a stop loss, while others believe that relying solely on stop loss is a sign of lack of confidence. However, no matter what, setting a stop loss is always to protect the trader's funds.

So, how to set a stop loss?

Firstly, it is possible to consider setting stop losses based on key positions. The key position refers to the position where you believe there is a high probability of a turning point or a position with a high profit and loss ratio. Specifically, based on an individual's trading system and risk tolerance, find the key position that suits oneself to set stop losses.

Secondly, effective stop loss positions can be set based on the order cycle. This needs to be determined based on the cycle of foreign exchange gold trading. If you are trading in a shorter period, it may be more effective to set the stop loss at a position with a longer period. The advantage of setting an effective stop loss position is to avoid market noise leading to early exit, but it may also cause losses when entering in the opposite direction of the market. It is recommended to choose an effective stop loss position when the system prompts a high probability of accuracy. When testing against the trend, both the position and stop loss position can be reduced simultaneously.

In addition, stop loss can be set based on historical transaction records. By analyzing transaction history, the average number of stop loss points can be obtained to determine the risk and reasonableness of the current transaction. If it is found that the stop loss points of the current transaction far exceed the usual stop loss points, it may be necessary to reconsider the entry position to avoid high-risk transactions.

In short, setting a stop loss is to avoid risks and protect the safety of funds. The specific stop loss setting needs to be determined based on the individual's trading system and risk tolerance. There is no fixed setting method that applies to all traders and needs to be adjusted according to their own situation. Before entering the market, it is necessary to consider the trading cycle and purpose to determine the entry position within the stop loss range, in order to avoid risks. Trading is doing a risk averse job, and stop loss is a lock that ensures the safety of our trading.