What happens to your trade if the market goes against you? Obviously, you get stopped out. Ever thought of how long this situation remains??
Surprisingly, after a few seconds, everything in the market comes back to its original position and the price goes according to your expectations.
All this disturbs you badly, and you have to suffer a whipsaw of the market. Definitely, you are searching the ways to avoid getting stopped out. You do not need to worry about this. This post will focus on the solutions to avoid getting stopped out.
This post is for every trader who wants to know: How to avoid getting stopped out?
You can avoid getting stopped out in three ways: 1. Getting aside before speeches can affect the market. 2. Placing stop loss (based on ATR) helps you to save your trade from being kicked out. 3.Re-Enter your missing trade is also an effective strategy to protect your trade from terminating.
Let’s get started to solve the issues of being stopped out!!!
3 Ways To Avoid Getting Stopped Out
Usually, traders stopped out to enter their trades while the market shows movements in price. Below are the 3 common ways to avoid getting stopped out
1. Stopped Out Before Starting Speech
Some spikes hit your trading decision in Forex. The main reasons for such spikes are some speeches. That has a great impact on traders’ responses. These speeches create uncertainty in the market.
Usually, traders stopped out their trade as if there is to be a speech. Mostly the price goes up according to our expectations. But it ends up being your first reaction. So it is better to avoid placing your trades before starting some political or business speech.
2. Stopped Out By Using Stop Loss
In forex, candlesticks are popular for placing stop losses. Another careful tactic to avoid losses is to apply stop loss established on ATR(average true range).
To understand the use of ATR, just consider the example:
Example: An ATR of 0.0186 (21-day) would point to the average price movement of 186 pips in a single day during the previous 21 days. When your stop loss is unable to bear the burden of ATR cost, it will make your stop loss more frozen.
Much volatility of the market will maximize the ATR. This indicates that have to minimize the volume of your trading position. It is necessary to enter your trade by following the percentage of equivalent risk.
3. Follow The Re-Entry Skill To Cope With The Missing Trades
Sometimes you missed your trade due to an emergency. Don’t worry!!
It is easy to enter the market again. You have to follow the re-entry plan of placing your entry.
This re-entry skill lets you trade the same type of trend that’s already missed by you. It depends on you whether you prefer to use the same position or wait for the previous trading position to reappear.
What Is The Best Way To Avoid Being Stopped Out
There are both options of using stops or not. And you should know when to get out of the trade. Not depending on the position or type of stop, the users of stops are always walking on the double-edged sword.
Below are some best ways to avoid getting stopped out:
- There is still a golden time when the stop gets hit close to the bad exit time.
- In my opinion, it is better to choose the real stop-loss order. You should prefer to observe a price warn on the basic rather than a real stop-loss order in the network.
- Use of the same price level for per-day movements provides more space. It also offers a chain of tough prices by winding up of the day.
- Without full preparation, never try to compete for the speedy market. Jump out before the business news.
- While seeing overswings on a sudden incident, sit aside and watch the clever trader’s trading show. No one likes to try their luck just before or after the issues.
- Don’t think about the stop, try little risk-free positions, let the specific risk of IC give support for you.
How To Avoid Getting Stopped Out Against Whipsaw
While entering your trade, many spikes may push you to be stopped out. But within seconds, the market came back to its initial situation. Now it is going as you had expected.
You even take a chance because of market spikes that kicked you out of the trade. The reason behind this getting stopped out is Whipsaw. Which causes many traders to think about how to avoid being kicked out.
Obviously, you are also looking for the super techniques to get rid of this whipsaw hurdle. You are lucky to overcome this pain by applying the following strategy:
Table of 5 solutions to avoid being stopped out:
|1.Placing a stop order
|When you are close to being targeted. You should use a stop order. This situation either make you nervous or train you to put stop order by using stop losses. Benzinga is a proven opportunity for you to be a winner.
|2.Fixate on your mental stop
|Picking a mental stop is very dangerous. Because it disturbs you to fix on your stop by eliminating your losing trades. If you don’t hold your mental stop, trades may go on loss. Which results in blowing up your account. So you should stick to your mental stop.
|3.Prefer the smaller size of trades
|Just try the tiny trades. It will be less risky. But it is also less rewarding. But it is good for you to avoid getting stopped out.
|4.Use options to take over your positions.
|Usually, Greek options are full of technicalities. So they don’t give you a real qualified barrier. However, a better understanding of options can secure you from getting scraped out.
|5. Try your luck by trading standard call plus options.
|By trying simple or hard option skills, you will be uncomfortable and riskier in your trade.
|6.How to cope with the risk
|Risk management is the key to a useful trade. If you handle risk effectively, you can avoid being whipsawed and stopped out.
How To Avoid Stop Hunting by Adjusting a True Stop loss
Avoiding stop hunting entirely is like being stopped out from all losses. The market does not go your way. But all you have to do is keep trading in the direction of moves. But when you are going the wrong way, you must stop the path of your loss.
You can fix your stop-loss order to avoid getting stopped out soonly.
Just follow these steps one by one:
1. Don’t Set Stop Loss Under Favor Or Over Against
Most traders fix their stop-loss under the supporting line. So this proves a wrong place for setting your stop loss. It should be better for you to adjust your stop in a place just away from the supporting or revering area.
In this way, you can stop your money from draining away in facilitating others to trade nicely.
2. Don’t Fix Your Stop Loss on A Dominant Area
Many clever traders enter their trades by using the exact highest and lowest points trending in the market. But they are unable to find the right place of fixing the stop loss.
They place their stop loss on a dominant level. They don’t care about the right handling of risk.
The best area to place a stop loss is the most convincing line practically. No matters it has 50,100 or 150 pips. The market has its own way to go ahead. It doesn’t focus on the place of your stop loss. It just jumps from one liquid market to the second one.
In other words, when you put your stop loss irregularly, others are awaiting you to swallow lively.
3. Place Your Stop Loss Where It Cancels Your trading Position
Usually, your entrance into trade depends on some technicalities such as pullbacks and breakouts, etc. Your stop-loss point should be fixed where it fails your trading position.
Below are the examples to understand this technique properly:
- For instance, in case of following a breakout, you should set your stop loss at that point where the price catches your breakout to beat it.
- In case of trying a pullback, you should fit your stop loss at a place where the price gets it to fail the pullback.
- Whenever the chart pattern is your trading choice, your stop loss should be set at a point where the price moves will cause the chart pattern to collapse.
After a complete understanding of an accurate stop-loss, you have to define the right size of your trading position. Only this is the right way to avoid a loss of a massive chunk of draining your account. This method works even if you are trading on the wrong track.
After exploring this post, you are sure to avoid getting kicked out of your trade-in a better way. It is easy to enter your trade at a proper time. But without understanding the concept of market whipsaw, it is hard to protect your trade from being thrown out.
However, if you find out the exact point of placing stop-loss, you will be successful to avoid getting out of your trade. If your strategy to cope with market whipsaw is strong. Then you can obviously know the level where your stop loss works.
When your stop loss is fixed in the right area, you will definitely overcome the painful experience of being whipsawed. Only this way avoids you getting stopped out, even if you are trading on the wrong way.