I have spoken & met with a lot of forex traders who told me they don’t like the idea of setting stop loss when trading.
Their belief is that the market would move in their direction and never go into negative territory. They say they have done all the necessary strategies that would make it certain that the market would move in their direction ultimately hitting their preset Take Profits.
Funny enough they love setting Take profits and forget about the idea of also setting stop losses, they are hundred percent certain that they would not make losses.
But this is the No. 1 cause of failure of forex traders, the quality of a good Forex trader comes from setting specific stop losses and leaving it there even when the market goes against them.
The importance of stop loss cannot be over emphasized, setting stop loss before entering a trade means that you are protecting your trades in the event of losses.
Stop Loss help to safeguard your trading Capital from being wipe out due to heavy losses. Remember that a loosing trade would only eat up more of your free capital only to lose everything in a short time.
The forex market is quite risky,and its very important that you manage your equity carefully before opening a trade, having this in mind means that you need to incorporate the use of stop loss in your trading strategy.
Forget about the use of mental stop loss, as most traders using this technique do not properly this no stop loss strategy only to end up wiping out their account in a short time.
Using Stop Loss when trading is one of the most important factors required to become a successful Forex trader.