Filtering out trades based on risk??

Hello

This is a question aimed at those who set their stops based on price action. I'm playing around with ideas here, so all comments welcomed.
Let's say I have a system that, when entered, uses a stop loss based on the previous bar's low. I may then choose to only enter trades where my risk is less than 5 points.
Does anyone use a system like this and if so, do you set targets accordingly to the stop loss? Also, do you find it has a major impact on your P&L?

Thanks
C

If the previous bar's high or low is only 5 points away from the close of the present bar, you obviously have sideways movement and it's going nowhere...

Unless, possibly, you are trading of the 1 minute chart. Sounds like flipping a coin to me.

I don't believe/can't accept a consistently probable and profitable 'system' based on only a 5 pip risk. Having really worked on fine tuning my entry I've now pared my average loss down to 25 pips (including spread and stop loss) and that loss generally indicates an immediate turning point allowing an opportunity to recover the loss and gain pips...30 trades/across 9 pairs over the past 24 hours with 6 losses and 6 scratch...and TBH I cannot envisage it ever getting more effecient....