How do I know where to put my stop loss/take profit?

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Old Dec 11, 2015, 2:20am   #1
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How do I know where to put my stop loss/take profit?

When I'm buying/selling how do I know where to place my stop loss and take profit? Should I use the price range of support and resistances to do so?

Any information is appreciated, thanks.
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Old Dec 13, 2015, 1:31am   #2
 
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What symbol are you trading, or is this a general question?

Will also need a figure for how much trading capital you have, or expect to have, in your account?

Lúidín
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Old Dec 13, 2015, 3:20am   #3
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Originally Posted by Bradleyule View Post
When I'm buying/selling how do I know where to place my stop loss and take profit? Should I use the price range of support and resistances to do so?

Any information is appreciated, thanks.

The general rule is always use TA to identify where to put both. Put your stop just beyond a level at which the picture that identifies the reason for going in changes to a reason to stay out. If your selected stock / market doesn't indicate both exits on its chart, move on to the next one. But take profits target is harder to identify as sometimes its into clear blue sky, nothing in price history to identify a potential s/r level, in which case, your guess is as good as mine.

Last edited by tomorton; Dec 13, 2015 at 11:37am.
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Old Dec 13, 2015, 4:39pm   #4
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When I'm buying/selling how do I know where to place my stop loss and take profit? Should I use the price range of support and resistances to do so?

Any information is appreciated, thanks.
most generic trading approaches look at Support / Resistance levels above below the chosen entry and suggest you go just past that as a stop

adjust your stake to equal that stop loss range = the 1-2% you are risking

basically the REAL secret to stops is not to hit them .........use them as hard stop spike safety nets ........good traders can see when a trade has gone wrong inside the stop and bail saving a few bucks ....soft stops ......

when you are wrong you are wrong.........make sure your trading strategy gives you that feedback as rapidly as possible

and if you don't know when you are wrong............boy have you got the wrong system !!

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Old Dec 13, 2015, 4:59pm   #5
 
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good traders can see when a trade has gone wrong inside the stop and bail saving a few bucks

when you are wrong you are wrong.........make sure your trading strategy gives you that feedback as rapidly as possible
This can't be emphasized strongly enough. Traders must determine in advance just exactly what will show them that they were and are right and exactly what will show them that they were and are wrong THEN have the discipline to act on their criteria. Instead what most traders do is place their stops for whatever reason then tell themselves that that's enough. And when the trade doesn't take off immediately after it's triggered, their anuses clamp shut and they begin to sweat, often/usually exiting the trade without waiting for price to hit the stop they so thoughtfully placed. Then of course price does take off as expected and they've become nothing more than spectators. Again. So they vow that the next time they will leave it the hell alone and of course their stop is hit. And price changes course and takes off in the desired direction after all. So the next time they widen their stops. One can see where this leads.

The simplest solution? Testing one's presumptions in order to determine what constitutes a high-probability trade and what only gives the appearance of being one. The "problem" of stops and stop placement then becomes secondary, if that.

Put in an order at a spot that would confirm the highest probability of a change in the balance. Then wait for the market to define itself. If your order is filled, put a stop where the market shouldn't be to confirm that your trade is still valid. "What is a valid trade?" you ask. One where the highest probabilities for price movement are in the direction of the prevailing force. (Douglas)


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Last edited by dbphoenix; Dec 13, 2015 at 5:06pm.
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Old Dec 14, 2015, 11:43am   #6
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taking profit and placing stop losses is an art form and using them in a rigid way for all the market conditions it will not be fruitful.......for example if you enter a long trade in a running market and as soon as you enter market stalls for quite a while your rigid RR of 1:3 has less chances to be reached....and here the appropriate measure needs to be taken....If the market is moving in a tight range you will be foolish no to take at least some at the other end despite your plan ...... When market is moving fast it might be wise not taking any profits at all till the end of the day....if you have enough stamina....

So my advice to you is always give weight to the market conditions and adjust to it, of course good money is made on good RR, but market does not care about your plan and you need to learn how to read it and act appropriately.

Last edited by Fugazsy; Dec 14, 2015 at 12:09pm.
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Old Dec 16, 2015, 1:11pm   #7
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Originally Posted by Lúidín View Post
What symbol are you trading, or is this a general question?

Will also need a figure for how much trading capital you have, or expect to have, in your account?

Lúidín
More of a general question but I am using a demo account at the moment selling 0.10 on gold.
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Old Dec 16, 2015, 1:16pm   #8
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The general rule is always use TA to identify where to put both. Put your stop just beyond a level at which the picture that identifies the reason for going in changes to a reason to stay out. If your selected stock / market doesn't indicate both exits on its chart, move on to the next one. But take profits target is harder to identify as sometimes its into clear blue sky, nothing in price history to identify a potential s/r level, in which case, your guess is as good as mine.
Okay so would you recommend using MACD in conjunction with RSI for the TA? I have learnt them both although they are both oscillators and I'm not sure if its a good combination. Instead of a take profit then I can just adjust the stop loss as the position I am holding increases in profit.
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