Stop-loss order: Should you include this instrument in your trading practices?
|The efficiency and safety of stop-loss orders are among those issues that flutter both newbies and traders with certain experience. It is quite a disputable topic. Some experts recommend using this instrument when the rates of assets chosen break local peaks to prevent excessive losses, while others claim that this tool pushes traders to make deals at unfavorable terms and advise abandoning it. Obviously, that makes traders puzzled and provokes them to try and test such orders first-hand, which often leads to missed profits and disappointments. Thus, the team of Traders Union resolved to execute their own research and provide investors with proven recommendations based on factual evidence.
To be more precise, they selected 1500 traders that cooperate with brokers from their top rating and can boast prominent records and constant decent profits and, then, asked them about their opinion on stop-loss orders.
What A Stop-loss Order Is: Basics
To start with, you should get a clear idea of this trading instrument. So, it is an order with a pre-specified execution price. Namely, a trader sets a rate at which a deal must be executed. It is an automation feature, which means an investor sets this stop-loss point to reduce potential losses to a minimum when he is out of a trading platform and cannot watch the market and see if the trend goes in a direction that is favorable for him or not. This tool can be used for both sell and buy orders.
Another situation when a trader can benefit from it is when he is not sure whether he will manage to keep his emotions under control. It is better to decide from the very beginning at which point you must close a deal by any means so that you do not face huge losses waiting for the price to change its movement to the direction, which will be advantageous for you.
Why Should You Refer to the Research by Traders Union?
As it was already noted their survey involved 1500 respondents with diversified trading experience, style, and earnings levels. In fact, this organization has already completed hundreds of researches and studies on the most acute topics related to trading, which are highly evaluated by both average investors and experts. The major aim of this source is to promote the self-education of traders and help them make deals at a maximum profit and at a minimum loss.
So, in the survey mentioned, respondents were asked whether they use this instrument, how often they apply it, which strategies they use such orders with, what types of stop-loss orders they prefer, and what their income levels are.
As a result, you can determine how popular and effective this instrument is and for which strategies it works the best based on the real experience of successful traders. Do not miss such a great opportunity to add another effective tool to your trading arsenal ― read this survey on stop-loss order use without a delay.
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