A stop loss is absolutely critical in swing trading and any kind of trading. Unfortunately a stop loss is regularly forgotten or unimportant to some investors. These investors do not comprehend the importance of a stop loss and end up losing money that could have been prevented. Where is the best place to place a stop loss order for a swing trader? Knowing the answers to this questions is crucial for any trader wanting to protect their trading capital and minimizing the risks involved when swing trading stock picks.

Placing a stop loss anywhere is only a little more useful than nothing using one at all. Never randomly place a stop loss.A set of specific rules or a system needs to be in place for placing stop losses. A good place to put your stop loss would be below your entry point when swing trading. The explanation is simple. If your swing trade drops below your entry point than the reason for being in that trade is no longer. If you put it too close though, you will not give the trade much room to move before being stopped out.

To protect yourself from harm, a stop loss is necessary when swing trading stock picks. A stop loss should be placed in any type of trade. Stop losses are the best way to protect your precious trading capital and make the most from your trading career.

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