How wide is your stop?

Assuming that you are trading on the specific timeframe, how wide should your stop be? I believe putting a very narrow stop and your stop will gonna get hit by retracement or noise, while putting it too wide and you will lose a lot when the trade has reversed.

Some put stops near a support or resistance, but on average how many pips is that for that particular timeframe?

The amount you lose should not depend on your stop but by your risk. So if you plan to risk 100$, all you can lose is 100$ whether your stop is 100 or 20 pips, adjust your position size accordingly.
You can use what we call a protective stop loss, this is done by putting your stops a few pips above or below past highs or lows, in this case you can place a higher stop for short orders because of the spreads.

yes I understand. But assuming I risk 1% of the account, so for example $1 for a $100 account, and I trade on the 30 minute timeframe, how wide is the stop loss for this?

I assume it is like this:

1 hour time frame = average stop 40 pips
30 min time frame = average stop 20 pips
15 min time frame = average stop 10 pips

Obviously we cannot put 10 pip stop on a 1 hour timeframe because it will just gonna get hit by noise or retracement. Or are there somebody here doing that?

IMHO, I do not use a prederermined pip value for S/L. I determine the placement of S/L according to my strategy ie S/R +/- 5, this then is equal to no more than my risk ie. 1%. then I can determine my position size. TF has no bearing on risk

your stops needs to be at a place where you realize that this trade is no longer right to be in, and therefore will vary from trade to trade.
It also depend on the characteristics of the trade pair. Hard and fast stops will invariable leave you frustrated, stop placing like trading is a art

^ ok now i get it. So when you say no more than 1%, this just means no more than $1 for a $100 account, which is around 10 pips on a microlot.

So your stop is no more than 10 pips? Thanks kockneerebell.

[(Balance * risk%) / |entry - stop|]/(pip value per lot)

I use this equation all the time.

can you guys give example? I am just a bit confused. thanks. I try to make my system as simple as possible by fixing the stop to a fixed number of pips.

Personally, fixed pip stops work well only if I strictly buy at support and sell at resistance since you’re already guaranteed that small barrier just in case price goes against you. If your system places much importance on entry s/r’s, then fixed pips would be ideal (and much easier). You just need to ensure your fixed pip stop is always slightly below support (if long) or always slightly above resistance (if short). If that condition can’t be met, I would just stay out of the trade.

hi,

thanks for the inputs, but I only need 10 pips per day or 10 pips per trade, so the only missing is the stop. I can put 10 pips limit, but the stop is how many pips?

A stop of 5 with a limit of 10 would be a 1:2 risk/reward ratio, which means you would need to lose twice to eat all of the gains of a single win. Depending on the win% of your system, you can decrease or increase that ratio, but I would not suggest taking it lower than 1:1 (50%/50%), since that would coincide with the random walk hypothesis.

in my opinion the best SL spot is above or below the previous high or low swings during the price move. the lower the timeframe you use the smaller the SL will be but the more fake outs you will have.

practice a lot and good luck for your 10 pips a day quest

Isn’t the market a fractal? If that is the case, you are just as likely to find fake outs on a daily or weekly chart as you are to find them on a 1 minute chart.

But, you can not do it in that way.

You have to consider several things when setting stops. Like volatility, which changes all the time, you have to look into the chart to determine the stop level depending on formation, support, resistance and so on.

Then you have to determine your risk in $ to avoid your account to be overtraded.

By then you also will ask how valid the trade setup is, for this particulary trade.

Applying the stop and target to a position is by far the most important discipline in trading, because that is where most starters fail. What is it worth if you have a fantastic entry price, if you do not understand to manage your trade.

its very difficult to trade 1 min TF. is not impossible but is very difficult

It isn’t exactly difficult. It is just more hectic. Your signals come 5x faster than on a 5 minute chart, so you need to be ready for a trade 5x faster.

the more info you have to made a trade the best. if trade a 1h chart you´ll have all the smaller tf to give you info. if you trade the 1 min tf the info you get will not be reliable.

and the signals don´t come 5x faster… you only get is 5 times more signals. and most of them will be wrong.

It’s all semantics at this point. Getting entry signals 5x faster is equivalent to getting 5x as many signals. y = signal, t = unit of time. You stated 5y/t != 0.2t/y, but it is evident that they are just reciprocals of each other.

Scalping is really a discipline for the few, and in the long run, say more than 10 years, you will not like to use this approach.

Spread, low volatility and other factors disfavour scalping, besides the fact that you are only going for the fewest number of pips available on each trade, compared what is in the daily range.

I’m going to drop out of this thread because this is an unreasonable debate. It’s clear we both disagree.