Stop losses

Hi folks

I am just starting out scalping and was wondering where scalpers place stop losses. I have read various articles on this website talking about risk/reward 1.2 or 1.3 etc. But when you are only scalping 2 or 3 pips max, surely you don't place a stop so close to the opening price or do you?

Thanks

This is the eternal 'problem' and there is no 'right' answer as it will depend upon your personality and strategy.

Personally I find CMC's 4 point trailing stop to be the most effective. The TS moves with each 1 point profit so it need only move 1 point in your favour to reduce your risk to 3 points, etc. I often close out before being stopped out to maximise profits - but it will drive you mad when it moves fast and a realized 6 or 7 point profit could have been a 20 point profit - but hey, that's scalping.

I prefer to get my entries right and keep my risk small - but no doubt others will have different ideas.

Good luck.

Hi mattboffey - I'm no scalper but some of the material you will read about daytrading will actually be about true scalping - i.e. buy a share that is bullish in this session or this part of the session and sell at the first tick into profit. The stop price would be the first tick into the red, so the nominal r:r is 1:1, you just rely on more up-ticks than down-ticks because the share is 'hot' and scalp with a broker with the lowest possible overheads, because, with costs, r:r is worse than 1:1.

Of course, there is no possible TA that will tell the scalper that the next tick will be up, not down, but if you're buying a bullish share in a bullish market, there will be more ups than downs. r:r of 1:2 or 1:3 is inapplicable here, that is for more TA-based trades, not momentum-riding scalps.

Thanks guys for the information taking it all onboard