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Unscrupulous brokers will encourage you

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Category: Futures Trading

Unscrupulous brokers will encourage you to place your stop close to your authentic price, virtually guaranteeing that it will be triggered, thus churning your account at your expense.

In case you place your stop a great distance from the original worth that you just paid for the contract, there's hardly any point in putting it - all it might shield you from is a collision with an asteroid belt. 

And should you place it too close, you may get "stopped out" solely to see the market transfer again in your favor. Bear in mind, markets continually 'vibrate' up and down. It's actually a lose-lose situation that benefits only the broker. And in a serious crash (invariably followed by a rebound) your stop loss order will probably be executed a great distance from its set off value, amplifying your loss.

What to do? There's actually no alternative however to determine from the beginning of your marketing campaign at what price stage you will abandon your general, long-time period position, and grit your teeth as the market moves towards you in the brief term. Be ready for big swings, calculating how much you may afford to lose, and consequently work out how a lot cash you should put at risk - much more than you suppose, if you work it out.
U.S. Government Required Disclaimer - Commodity Futures Trading Commission

Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. All trades, patterns, charts, systems, etc., discussed in this advertisement and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author and do not necessarily reflect those of the publisher or Tradewins.