5(e). Using Delta to Set Stop-Loss
Using Delta to Set Optimal Stop-Loss
Last updated
Using Delta to Set Optimal Stop-Loss
Last updated
Delta proves to be a potent tool for setting Stop Loss, much like its effectiveness in Take Profit decisions. Its strength lies in identifying crucial levels of buy and sell pressure, which is essential for traders to identify on the charts. These pivotal zones of heightened sensitivity serve as ideal locations for placing your Stop Loss, offering traders a shield against adverse buy or sell movements. Think of it as erecting a fence around your property—though not impervious, it serves to make unauthorized entry more challenging.
Speaking of buy and sell protection, positioning your SL beneath the Delta zone firmly anchors it beneath a clearly defined level of significant buy support, as unmistakably indicated by Delta. The image below illustrates a proper LONG ENTRY, where the SL is effectively anchored below Delta, as demonstrated.
The image below demonstrates that even when sellers exerted strong downward pressure to breach Delta, our Stop Loss (SL) remained protected, as anticipated, thanks to Delta's identification of this critical level of sensitivity and buy support.
Leveraging Delta for Stop Loss (SL) placement is a wise choice whenever feasible. The added layer of protection it provides can often determine the outcome between a successful and unsuccessful trades. The team at dRisk loves Delta, and SL protection is just one of the many reasons why.
