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The Stop Loss - the most important element in trading, in my opinion. My main job as a trader is to manage risk, and the tool I use to do that is a Stop Loss. The protective stop, so it’s called is meant to PROTECT our account.

However in many cases, the SL does not protect us, but rather it HURTS us. I’ve seen too many times when a trader gets stopped out prematurely because of incorrect placement of their stop loss.

For my trading, the stop loss is the FIRST thing I look for, followed by the entry and lastly the take profit.

So the ultimate question is where is the right place to put your Stop Loss?

Here are some tips to find the right place to place your Stop Loss:

Look for the last level barrier or swing point
Maximum area for price to go for the trade reason to be valid still
Use fib extensions - objective levels
Be wary of stop hunt zones

TIP: Look for the correct SL placement first, then adjust the entry so that you can still achieve a good risk to reward trade.

Remember, the stop loss should protect and not hurt you!

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