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Using Fibonacci Extensions to determine the stop to lose Less Money

To comprehend the use of Fibonacci Extensions to where to place trade stop to prevent loss apart
from solely depending on the Fib levels, we must understand a few time tested methods.
Technique 1: The right place for Stop is next to Fib

Suppose you are planning to enter at = 38.2% (Fib Level)
Then stop should be at= 50.0%
If you are confident about 50.0% level, then feel free to set it at 61.8% and keep changing depending
on your trust.
Do you remember the 4 hour chart (EUR/USED) of Fibonacci retracement article?
Let’s get a look again:

This method is all about believing that a certain percentage level would hold as a resistance point.

Technique 2: Place Stop Past Current Fluctuation of High/Low
This technique is a bit safer way. It means when you are in a long trade you can place the stop loss
beneath the recent Swing low to get the support level. But the price should be in an uptrend during
this.
And during the downtrend, place stop loss higher than Swing high, but it is only valid if you are in a
short position.

How to choose the right way?
The fact is you need to blend your experience, understand about the tools, ongoing market analysis
to get the right Stop Loss point for you. Don’t rely blindly on Fibonacci levels as the foundation of
stop loss placement because it’s not a sure thing.
Combine all the available tools and turn it in your favour.

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