How big do you set your stop losses for the Indicies

[Rasputin1]

Mainly TRYING to sb on the FTSE 100 atm with a view to making quite a few trades in a day but just recently I have fallen foul of not setting my stop losses either high enough or low enough, now I havnt been stung by many points normally they stop out only 2-4 points to early so does anyone have any advice for working out how far I should set my stops?

Cheers

 

[Mr Flibble]

Hello FTSE can have some huge swings expecially when the yanks wake up. Around 1.00 pm you're gonna get stopped all the time it just whipsaws. Usually fakes out too its one heck of risky indices to trade. Try it from 9:30am - 12.00pm.

Now about your stops? Need to know your style first buddy before I can answer that. If you're playing a range have it pretty tight say 5 points or so. Better still post this in the FTSE thread where chaps play it all the time. RR if you're new should be 1:3 i.e you set your stop to 10 if you're going for 30 points.

Should note US clocks changed so that should read 12:00pm when markets go crazy

 

[N Rothschild]

use a spanish stop

 

[Rasputin1]

Cheers for the advice. Im still learning and developing a style only looking for 10 point moves really till i find my feet. I realise that in realative terms this is tiny so I have been keeping an eye on america via fidessa. Will head over to the FTSe thread and do some more reading because atm im guilty of over trading and even though i spend all day starring at the mkt its not an efficent way of doing it if im looking to only pic up a few pts a day.

 

[No one Knows]

Ive been spreadbetting the ftse everyday for about a month between 8-10:30AM and use a 20 point stop loss with risk to reward 1:1 with limited success though, the idea was to try and get 70%+ success rate by having smaller target. cant seem to get more than 50% with risk to reward 1:2 or 1:3. can easily get whipsawed with smaller stop losses though.

 

[tomorton]

Hi Rasputin1 - FTSE's fun to trade and has low overheads if you're UK based so makes sense, but it is a slave to the US as said above. But 10pts target? - I'm sure you've seen the index move 10pts in 2 minutes, I can't see how that can be better than coin-tossing. You're making the job of making a profit really hard for yourself.

Longer time frames, using end of day prices and positions over several days, will allow you more time for considered TA and wider profit targets and stops, so you should not get stopped out by normal price volatility ('noise'). On shorter TFs, treat the FTSE as two sessions - be out of the am session by 1200, re-join when the US has set the new direction after NY opens.

Either way, always set a stop-loss and always obey it - and keep your loss to less than 2% of your capital per trade.

 

[Yamadao]

I enter the market with a "bracket" order (1 MKT & 1 LMT conditional order placed at the broker) and adjust the initial stop-loss above/below the High/Low of the Day. Ultimately, the stop-loss is initiated with sole discretion to avoid getting hit with unrationality in the Equities market. My correlated indicators within the Bond and Currency markets are ultimately what will push me to take a loss. I've found Bond and Currency markets more in phase with current macroeconomics (e.g. Greece deficit).

 

[Rasputin1]

Yes Tomorton your right they are too small hence why im trying to look for the bigger swings etc so it means less time watching the screens and more time studying as well as all the other work i have to do. Im only in for £1 a point atm till i find my feet as theres no point throwing money away but it means a little more than working on a demo account.

Thanks for all the advice lets see if i have learn anything new over the weekend come monday morning

 

[Pi3141]

Could I just ask whether its better to set a fixed stop loss, e.g. always 20 points away from my entry price? - Or is it better to place a technical stop loss e.g. just below the support and resistance levels? In the case of the latter, would you need to adjust your stake per point in order to keep within the 1-2% risk per trade strategy?