Clear Sermon on Stop Losses Needed!

[naqviimran]

Dear Immy/Grant/Steve,

For the beginners, as you might agree, the most important thing to be sure about, after entry points, is the stop loss.

I would be very grateful, if one of the GURUs could dedicate a reply to clear-cut advice on stop loss mechanisms, especially how to trail them.

It has been a difficult time for me to find aggregated information on stop losses. Although, the setup book is good reference, but I am sure that one dedicated post with all you experience will be very very very useful for beginners like me.

Thank you in advance and may God bless you all!

[Grant]

evening,

Go to post 1 of my journal and download the trade management document. That will answer your questions.

cheers
Grant

[immy]

Agreed with Grant... and
Thank you Grant

[wiseambitions]

Has any work yet gone properly into a standrd set of tp and sl for a given timeframe on popular pairs?

Sorry if I missed anything already suggested

I was thinking in terms of a 1:1 rrr or better for example 10tp and 10sl

I realise the best results come from baby sitting trades eg setting sl according to aims boxes and winging it with tp's. But my query relates to days when one can leave an auto order (pending order) but wouldn't be able to watch the session

Nothings easy in fx though!

[Dave]

Hi Ray. I'm going to preempt Immys reply here, lets see how close I get!

1. 10 SL and 10 TP will lose you money over time. We pay a spread on every trade so even if you happen to end up 50/50 win/loss you lose over time;
2. Your winners have to be bigger than your losers, so 1:1 RR is not the answer, you need to give your winners a chance to run;
3. Let chaos decide and follow the rules and the top two take care of themselves. Keep SL small, if price comes back inside the aims box that it has just left then the very reason you entered is no longer valid so get out. If price is moving in your favour trail your stop or at least target a point that is better than 1:1.

So with regards to setting and leaving trades. I would say set your SL back inside the aims box that price has just broken out of, or at furthest distance opposite aims. This gives price a chance to retest this level now looking for new S/R so youre not choking the trade. I'd have a trade manager move to BE at about +7 or +8, and once that trade manager kicks in I'd want it to trail in some way so if price misses TP by 0.0000001 pips you still get something from the trade. And I'd make sure my TP is at least greater than the distance of my initial stop, if not 1:1.5 or more.

Now just to follow my own advice....
Dave

[Bettina]

Hi, would like to add my sermon also, to show that there is much individual feeling ( what is comfortable for you ) in deciding on SL strategies.
1 ) Largest SL : above/below opposite box
2 ) above/below close above below red line ( alligator teeth )
3 ) (close) above/below red line
4 ) above/below close above/below green line ( alligator lips ), means above /below candle with opposite dot
5 ) appearance of opposite dot
6 ) in very quick markets, where price is steeper than the green line : trail the candle high/low beginning after 5 consecutive candles in the same colour.

7 ) Grants strategy : Initial stop above / below entry candle, at +5 to SL4
8 ) Very small initial SL : above/below the aims level, if your entry was below/above it ( what Dave expressed )

I think, the most commonly used strategy is:
Initial stop : Opposite side of the box or red line
Trailing : Opposite dot or opposite side of the box

I myself have not really decided, which strategy should be fixed part of my plan.
It depends all, which one you feel most comfortable with !
Hope it helps a little.
Bettina

[Andreww]

The strategy I have used for years on those occasions when I cannot monitor a trade is to close out half my position when price reaches whatever level I am happy with. Then trail the other half with the stop on that half moved to breakeven and trailing from there.
There are several eas around which will do this.

Andrew

[Mdock]

Hi,

Stop loss on black dot (candle close below the lips of the alligator) works for me.
Gives me small losers and gives the trade enough room to breath.

Cheers Mdock

[immy]

I Agree with all of the above. If you want to put a trade and leave, Adnrew's advice is sound. Based on my experience 10-20 pips waves are common on EU M1. M5 also moves 20 pips (give or take, not a fixed figure it varies) so 15pip TP with 7-10 SL would do but you must hit at least 50% success rate, without error trades to remain profitable. So best would be to trade higher time frames if you don't have time to watch your trades.

The Best Consistently Profitable Trad Management I've seen for M1, to make little bit of money on daily basis is Grants SL management.
If you want to make big big gains and want to increase your return on investment you need to let it run. And here is a simple strategy for that.

Take The Normal S1 S2 Setups.
Trade Management:

Note: Exit with a profit and exit with a loss are two different things. So

Exit with Loss:
Only Red line close, with emergency SL other side of AIMS box or at a spot you think it will not easily get hit. Its what they call the Disaster Stop Loss.
Profit Taking Exits:
1. Red Line Before you see divergence and price remains parallele to gator lines (meaning it did not go too fast too far from green/red line)
2. Green Line: After divergence exit on green line close.
3. Trailing Candles: If price moves too far too fast, that exiting on green would mean giving back too many pips, start trailing if you see either a very big candle or 5 consecutive same color candles.

Cheers!
Exit is an ART!

[Tomi]

Hi fellows, nice ideas here. Immy, thanks for listing these points here. I have similar thoughts and encouraging that I just might be on the right track in the long run.

Trolling is a art, but exit is an art... if you know the joke