The most important thing to remember is not to worry about what the market will do.
Instead, traders should worry about what they will do when the market reaches their “pain point” or “happy point.”
These are the limits of where they can trade: if the “pain point” is reached, then they should stop the trade to avoid losing everything.
The forex market isn’t simply a place for speculators: it is a place where massive changes can happen without notice.
For this reason, having stopped in place is paramount to managing funds.
Money can suddenly move in massive amounts due to financing equity investments, mergers and acquisitions flow, infrastructure plays, central bank reserve management, and many other factors.
The market is frequently throwing unexpected changes at traders, and with the sudden changes in rhythms, it would be financial suicide to not have stops in place.
