Stops & take profits. (in forex etc. )

Pat494

Legendary member
14,589 1,564
I would like to open that old chesnut of how big should trade stops and take profits be, if any ?

To open the discussion I have been with big ones, 1000s of points and right down to tight stops without really finding a satisfactory one. At the moment I am using a Stop Loss of 150 and a Target Price of 400. With a trailing stop of 50.

How about you ?
 

Pat494

Legendary member
14,589 1,564
I have also tried Bollinger Bands, ATR (14) and others.

Placing the stop below the previous bars lowest/highest has had it's moments too.
 

Jessi_trader

Veteren member
4,110 172
I would ask myself the objective of stops, often widely misunderstood and resulting into too many failed trades, this happens when fear and greed influence your stop decision.

I would ask these questions:

1. How much I am willing to lose in a trade.
2. In my setup, pattern or trend when I would think that I am wrong side of market.
3. Probability of setup, pattern based on primary market trend.

no. 2 and no. 1 above are key... if they matches I would go.....
 
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alexaherself

Established member
560 149
(With the exception of the method shown in my Trading Journal, which I still use) I trade intraday trends according to various different methods of defining/identifying them. These are not Volmanesque trades from 70-tick or S30 charts. The aim isn’t necessarily to win more trades than I lose, but to tick over without too-significant losses while also trading often enough to catch some bigger intraday moves.

My initial stop-loss goes above/below the last swing-high/low, but very rarely more than 20 pips away from the entry, and I trail it manually above/below developing swing-highs/lows. Not too invasively at the start, because experience has taught me that there’s nothing more infuriating - even though one can sometimes re-enter - than getting the overall direction right and still losing money.

I do like moving stop-losses to breakeven, though, because I think loss control is more pressing than profit pursuit in my routine trading.

Exits are my problem. Usually. Other than as mentioned above, I can’t bring myself to trade with fixed targets, unless they’re determined by firmly expected support/resistance and even then only with difficulty, hand-wringing and a grave sense of unease. For this reason, closing trades is often an issue for me. I’ve always thought money-management in general, position-sizing specifically, stop-adjustments and exits are far more significant, overall, to determining success, than entries.

I wouldn't want to close trades according to "indicators". I do close them manually in accordance with bar patterns, though: I close if my reason for being in the trade is no longer valid, and bar patterns define that. It's not all "waiting for the trailing stop take the trade out".
 
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Forexmospherian

Legendary member
39,928 3,301
Re Stops and taking profits

Because I am not a KISS type trader - I probably intraday trade differently to anyone on this forum - with the exception of maybe a few other guys - one of them being Major Magnum

Any stop over 7 pips to me is a waste of time and shows I am not timing my entry correct.

As long as the spreads are under 2 pips - and the main pairs I trade are all from 0 3 of a pip to maybe 1.7 pips then stops of 3 to 5 pips are the norm - on all trades whether after just a 5 pip target or a few hundred pip target.

Entries are paramount and if I can get them correct - everything else is easy.

I don't use hard stops of only 5 or 7 pips - I baby sit the first 10 -20 mins of the trade - and If I get it wrong I will exit with ideally a plus 1 or 2 - or worse case scenario a minus 3 or 4 pips.

Targets are based on session price structure and time of the session along with interim levels

Once i have a RR of ideally over 1.5 ie over 7 or 8 pips if its not moving as I require i will take part stake off and try and get my stops in a few pips profit - not break even - why would I do that ???

Timing and time is important for my method - most successful scalps last for 5 mins to even 20 mins and range from 7 -25 pips .

Its then a case - will the trade go further - but I don't have to bother - I make sure I then have at least 3 or more pips in profit on say 30% of original stake and then just check every 15 -30 mins .

If I am lucky enough to catch a "runner" - once I am up over 30 pips - I trail my stop at approx 50% of move and will even scalp against this so called "free trade" as its then a win / win trade - what ever happens - ie I either end up with just 3 pips or say 15 pips - or I make 50 or 100 or even 500+ pips.

Exit are decided by FX correlations and times of the day.

I catch interim tops and bottoms every day - its possible - but needs years and years of experience and skill etc to be able to do it. I don't advise this method to any newbie or intermediate level trader - but if you have done your 10K hours at the "coalface" then you should be well on the way to obtain excellent timing etc although don't expect a continual 90% win ratio - anything from 65 to 85% on batches of 100 trades is easily enough -and with you ending u every day with a few wins with RR's over 4 than your rewards should always be very high - even with low risk.

Good Trading


Regards


F
 
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Pat494

Legendary member
14,589 1,564
Re Stops and taking profits

Because I am not a KISS type trader - I probably intraday trade differently to anyone on this forum - with the exception of maybe a few other guys - one of them being Major Magnum

Any stop over 7 pips to me is a waste of time and shows I am not timing my entry correct.

As long as the spreads are under 2 pips - and the main pairs I trade are all from 0 3 of a pip to maybe 1.7 pips then stops of 3 to 5 pips are the norm - on all trades whether after just a 5 pip target or a few hundred pip target.

Entries are paramount and if I can get them correct - everything else is easy.

I don't use hard stops of only 5 or 7 pips - I baby sit the first 10 -20 mins of the trade - and If I get it wrong I will exit with ideally a plus 1 or 2 - or worse case scenario a minus 3 or 4 pips.

Targets are based on session price structure and time of the session along with interim levels

Once i have a RR of ideally over 1.5 ie over 7 or 8 pips if its not moving as I require i will take part stake off and try and get my stops in a few pips profit - not break even - why would I do that ???

Timing and time is important for my method - most successful scalps last for 5 mins to even 20 mins and range from 7 -25 pips .

Its then a case - will the trade go further - but I don't have to bother - I make sure I then have at least 3 or more pips in profit on say 30% of original stake and then just check every 15 -30 mins .

If I am lucky enough to catch a "runner" - once I am up over 30 pips - I trail my stop at approx 50% of move and will even scalp against this so called "free trade" as its then a win / win trade - what ever happens - ie I either end up with just 3 pips or say 15 pips - or I make 50 or 100 or even 500+ pips.

Exit are decided by FX correlations and times of the day.

I catch interim tops and bottoms every day - its possible - but needs years and years of experience and skill etc to be able to do it. I don't advise this method to any newbie or intermediate level trader - but if you have done your 10K hours at the "coalface" then you should be well on the way to obtain excellent timing etc although don't expect a continual 90% win ratio - anything from 65 to 85% on batches of 100 trades is easily enough -and with you ending u every day with a few wins with RR's over 4 than your rewards should always be very high - even with low risk.

Good Trading


Regards


F

Interesting points F.
Do you spend many hours watching the screen ?
I have tried to avoid too much screen time these days and do a bit of gardening etc. before returning. So my s/l and t/p are much bigger.
 

Forexmospherian

Legendary member
39,928 3,301
Interesting points F.
Do you spend many hours watching the screen ?
I have tried to avoid too much screen time these days and do a bit of gardening etc. before returning. So my s/l and t/p are much bigger.

Hi Pat

I had used to spend anything up to 8 or 10 hrs a day during my first year of two of going full time - after similar time per day when I was part time - but then only 2 or 3 days maximum per week

Then after I discovered the key periods of the UK day session for my method I was able to reduce this to only 20 mins per hour - so time actually spent watching the screens nowadays over a 10 or 12 hr day session is in fact more likely just 3 to 4 hrs a day.

My working day is normally from after 6 15 am to approx 5 00 pm with many breaks of up to even 90 mins over that period. Many days I might hit my daily target by 9 30 - 10 00 am - and could then have the rest of the day off - but after being used to working 50 -70 hrs a week during my business career - I am used to a work ethic or discipline - so don't take too many afternoons off per month.. Rarely do I work over 200 trading days a year.

I reckon if I was 20 or 30 yrs younger I would push myself more but I do try and find a balance with having two kids still under 20 . I am still healthy and want to try and remain that way - in fact still don't need any glasses for driving or reading at age of 61 and so know the importance of looking after yourself and hoping i can enjoy my retirement which is not that far away :) ( I hope )

Regards


F
 

2be

Experienced member
1,907 304
Re Stops and taking profits

Because I am not a KISS type trader - I probably intraday trade differently to anyone on this forum - with the exception of maybe a few other guys - one of them being Major Magnum

Any stop over 7 pips to me is a waste of time and shows I am not timing my entry correct.

As long as the spreads are under 2 pips - and the main pairs I trade are all from 0 3 of a pip to maybe 1.7 pips then stops of 3 to 5 pips are the norm - on all trades whether after just a 5 pip target or a few hundred pip target.

Entries are paramount and if I can get them correct - everything else is easy.

I don't use hard stops of only 5 or 7 pips - I baby sit the first 10 -20 mins of the trade - and If I get it wrong I will exit with ideally a plus 1 or 2 - or worse case scenario a minus 3 or 4 pips.

Targets are based on session price structure and time of the session along with interim levels

Once i have a RR of ideally over 1.5 ie over 7 or 8 pips if its not moving as I require i will take part stake off and try and get my stops in a few pips profit - not break even - why would I do that ???

Timing and time is important for my method - most successful scalps last for 5 mins to even 20 mins and range from 7 -25 pips .

Its then a case - will the trade go further - but I don't have to bother - I make sure I then have at least 3 or more pips in profit on say 30% of original stake and then just check every 15 -30 mins .

If I am lucky enough to catch a "runner" - once I am up over 30 pips - I trail my stop at approx 50% of move and will even scalp against this so called "free trade" as its then a win / win trade - what ever happens - ie I either end up with just 3 pips or say 15 pips - or I make 50 or 100 or even 500+ pips.

Exit are decided by FX correlations and times of the day.

I catch interim tops and bottoms every day - its possible - but needs years and years of experience and skill etc to be able to do it. I don't advise this method to any newbie or intermediate level trader - but if you have done your 10K hours at the "coalface" then you should be well on the way to obtain excellent timing etc although don't expect a continual 90% win ratio - anything from 65 to 85% on batches of 100 trades is easily enough -and with you ending u every day with a few wins with RR's over 4 than your rewards should always be very high - even with low risk.

Good Trading


Regards


F
I use hard SL always, especially on larger lots, just in case my computer or internet goes down. It has happened, I also have other means to get internet running, but it might take a bit of time.
For that same reason I keep the phone numbers to the dealing desks accessible.
My initial SL is either arbitrary, (x amount of pips e.g 11), or base on market structure of a given TF.
 
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EngulfingCandle

Newbie
1 0
My stop loss depends on the pattern but I do have standard stops that I tend to gravitate towards. To get my stop loss I ask myself "at what point would this trade idea be invalid?"

Take profits are set at a minimum of double my SL. I use this because the required success rate to breakeven is pretty low and gives me enough safety margin to account for mistakes/human error etc.
 

Pat494

Legendary member
14,589 1,564
I notice that on my 2 MT4 accounts, one has the minimum trailing stop at 40 and the other's is 15 !

Not sure one should even use one ?--
 

hatemypips

Established member
619 45
I notice that on my 2 MT4 accounts, one has the minimum trailing stop at 40 and the other's is 15 !

Not sure one should even use one ?--

I think it;s all depend current trading method used. some traders prefer tight trailing start, others may choose higher one. but these minimum are not related with broker trading condition, even when the mt4 default are 40, we can simply start our trailing (script) at lower pips if the brokers trading condition allow to.
 

pro4Xtrader

Active member
107 6
I found it safer to use stop loss of 1/2 - 1/3 of my target. The target is different depending on the timeframe I am trading, from 50 to 700 pips.
 

4FXtrader

Member
63 0
SL and TP

I would like to open that old chesnut of how big should trade stops and take profits be, if any ?

To open the discussion I have been with big ones, 1000s of points and right down to tight stops without really finding a satisfactory one. At the moment I am using a Stop Loss of 150 and a Target Price of 400. With a trailing stop of 50.

How about you ?

SL and TP depend on these rules. (These're only my rules. :D)
1. Which instrument you trade. Different kind of instruments have various daily movement. Some of them move a lot (such as 200-300 points a day), some moves only 30-40 points. At the first example I would put 30-40 points SL (always on the high/low of the top/bottom of the entry). At the second example I would put about 5-10 points SL.
2. On which time frame you trade. In M5 you need smaller SL than in H4.
3. What type of trading system you trade. I use technical analyses and I always put SL on the top or on the bottom of the entry.
4. I always close my trades manually but I use Fibonacci Retracement to have an idea of the take profit level. These levels are 161.8% and 200% on H1. I always pay attention to these levels and if there's a closing signal, I close the position. If the price goes further I let it run.
 

Mr Fox

Established member
510 136
I would like to open that old chesnut of how big should trade stops and take profits be, if any ?

To open the discussion I have been with big ones, 1000s of points and right down to tight stops without really finding a satisfactory one. At the moment I am using a Stop Loss of 150 and a Target Price of 400. With a trailing stop of 50.

How about you ?


As we all know, everyone has different styles, so there is no hard, and fast rule, but it is an interesting topic to hear other peoples perspectives. 1,000's points, fork me, that's a lot. :eek:

For me personally 5 pips max, sometimes i may get stopped out, and re take the same trade 3 times, however with my style of trading the probability of 5 or less has a higher expectancy than not, but most of the time, 3 pips against me, and I'll pull out, rather than waiting for the 5 to be hit.

Best
John.
 
 
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