The PLOSS instruction in ProBuilder language is used to set a stop loss at a specified number of points away from the average position price. This feature is crucial for managing risk in trading by limiting potential losses on a position.

Syntax:

SET STOP PLOSS x

Here, x represents the number of points from the average position price at which the stop loss should be set. The value of x should be adjusted based on the specific risk management strategy and the volatility of the instrument being traded.

Example:

myMACD = MACD[12,26,9](close)
long = myMACD crosses over 0
IF NOT LongOnMarket AND long THEN
    BUY 1 CONTRACTS AT MARKET
ENDIF
// Set stop loss at 50 points from the average position price
SET STOP PLOSS 50

In this example, a trading strategy is implemented where a position is entered based on the MACD indicator. The MACD (Moving Average Convergence Divergence) is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. The trade is executed when the MACD crosses over zero, indicating a potential upward movement in price. Immediately after entering the position, a stop loss is set 50 points away from the average price at which the position was opened, using the PLOSS instruction.

Additional Information:

• The PLOSS instruction is particularly useful in volatile markets where price swings can be large and sudden.
• It is important to choose the value of x carefully, considering both the typical price movements of the instrument and the trader’s risk tolerance.
• The term “points” in the context of PLOSS refers to the smallest price increment change that can occur in the trading of a particular instrument.

Understanding and using the PLOSS instruction effectively can help traders manage their risk and protect their trading capital.