Moving stops to BE+1 quickly vs letting the entire postion with stop to 'breathe'

So i have been playing with some back testing and have been trying to refine my trade management strategy.I am becoming very aggressive with my SL. There are 2 thoughts do your trades need a lot of room to breathe after they have become profitable? In my opinion if my trade set ups are correct price should rush away from my entry in relatively short time. So depending on your TF or how large your normal take profit targets is. Here is my idea/system move your stop to BE(including your spread) you can BE+1 if you want to have a"winner. Although a scratch in my book is a winner. I have no idea how to calculate how much potential profit i would lose if i do this system if someone could tell me how to calculate that or calculate it for me that would be great. Otherwise here is the situation

You have a trade that has become profitable. I would move my stop to BE after about 20-25pips up or 30% of the way up to my profit target. Yes I get stopped out a lot with scratches or a small pip profit. However my win rate is quite high due to this and it prevents capital erosion. So how much do i lose when the price swings back up and hits my profit target vs how much i save when it would have stopped me out???

When or how do you guys manage your stops? Do you scale out or just move to BE and let it ride ‘risk free’?

I tend to move my stop up to B/E+1 quite quickly. Around the 20 pip positive mark.

If I get stopped out as price moves back through my zone, but the signal is still valid, I’ll re-enter, often at a better price, and get it again.

Eventually one of the moves will be more substantial, and I’ll be along for the ride.

I do exactly the same, it works well for me. I did it yesterday on the euro/dollar & took a nice 63 pip profit. My trading log shows more wins than break-evens which is down to good entry points, but the main gain for me has been a lot less losses than my earlier trading. 10 trades, 6 wins 3 break even, 1 loss. Not bad for a newcomer to trading. One thing that I must say is that since I have started trading this way, I always watch the action as the trade runs & stop it out early if it starts to turn around. I always set the TP at least 3 times the stop loss & will move both stops parallel with the price if it go’s in my favour, this maximises profits on the better trades. Hope this has been of some help to you & good luck with your future trading, Tony.

I do almost the same, since I trade the 1H chart my signals are good for about +15 to 30 pips… then I move my SL to B/E… if there is a clear retracement then reenter at better price

If I have a 30 pip stop, I’ll wait until I’m +30 pips into the trade before I adjust to BE+1.

Likewise, if I had a 50 pip stop, I’ll wait until I’m +50 pips into the trade before I adjust to BE+1.

I may as well add that I look at the average daily range, this way you can be helped by seeing how much breathing space you may encounter. But in the main, i look for a 30+pip profit before I consider moving my stop loss to BE plus spread. The next question is how much into your stop loss must you be before you move your profit target to BE. This can be a powerful type of analysis if you know its not going to hit you original profit target beyond the break even point.

Sweet, i really needed more opinions but I am definitely going to be more aggressive with my SLs. As for re entering, since i use S/D pretty much 100% the only way I would be able to enter under my system would be a confirmation entry. That still gave me 3:1 Reward Risk (my minimum requirement for any trade). Sounds good though. I think its better over all to just have scratches not only for the capital, but for psychology. You know that its free money right now. If it hits my TP great if not, i dont lose a dang thing and can move to the next trade unhindered.

I would never move my profit target to BE. If this happens then I personally feel i am ‘Hoping’ to get out of this losing trade on a Break even. That is against one of my rules. I would probably either let it completely stop out for the entire SL,or close the trade immediately and move on. If you could enlighten me to your results doing that or how you systematize it would be great. Because at this moment if PA is really bad and inside my SL zone and not looking like its going to take off, i just close my position.

@Meihua, one question. Did you utilize trailing stops or do you move it manually ?

I do the same way as you.

To reiterate, i move my stops to BE when a trade goes 1:1 risk reward.

I move my stop manually espeically when we are very close to my entry. I believe keeping an eye on the PA is important. Although if we are well into my profit zone I will put a trailing, this also happens if i am unable to monitor my trade for several hours. My trades usually don’t last more than 24 hours. So sleeping or away from the computer. But i truly believe in using technical stops.

Quite surprised no has mentioned scaling out, although I know not everyone does this.

I look to take half profit at 25-30 pips, S/L to BE and let the rest run to the next S/R level. If price stalls, news is coming out or I’m approaching 18:00 GMT I would normally close for whatever I had.

I am of the belief that taking profits often is one of the keys to being successful in forex. I use VSA to define my entries but once entered, trade goes to BE +1 at +20 pips. Protecting your capital is very important and is a good habit to get into. If your entry was wrong and the PA is going to end up taking out your stop isn’t it better to get out of the trade before it gets there?? From there as the trade progresses, I take 1/3 off at +50, then another 1/3 off at +100 and typically leave the last 1/3 to run with no TP and will close it manually. I leave the last 1/3 for the unexpected break out which seems to happen once a month or so, though not always in the direction of the trade…lol… but when it does the rewards can be staggering. And if it looks like it is going to reverse before any break out then just close it manually. If the pair is trending and your in the direction of the trend, this can lead to 100s to 1000s of pips on the last 1/3.

I look for trades which would yield at least 100 pips, and if you look at the monthly, weekly charts you can get a good idea of what the potential of a trade might be.

Money management on the fly is key in my opinion. Get good at reading the charts and move your SL/TP accordingly. I wouldn’t pick a 100% fixed strategy of not exiting trades unless TP or SL is hit as you’ll never maximise the profit potential of the trade. BE+1 is a fair enough tactic by why not considder exiting the trade early if it appears to be turning against you to lock in profit, then then re-enter the position if the price continues with your initial expectations and quickly set the SL back at BE+1 for virtually no risk?

(harder to do that it is to type though :P)

Actually this is a valid point. If i closed a trade that looked like it was turning against me. take the profit. then re enter. Depending on how much i risk the 2nd time i may even get 1 free trade with the profits of the first. If i can reenter and get back to BE+1 who cares its just adding to profit. Hey a pip is a pip. I really have to come down with some structure here but very valid idea.

MeiHua, Another way to approach this is to split up each order into segments. 3 parts, 2 parts, 5 parts. Whatever makes you comfortable. Set a Micro, Mini, and full target (or 2/3) and cut orders at those places. The key is, always have a Micro target, so once you hit 5-10, SL to BE so you have that 5-10, plus another 1(if youre BE+1) and then the possibility to hit another 1-2 targets. This is how I learned to manage my positions and prevent as you said capital erosion.

Before I get yelled at - CDAWG I now have read your post, however, I would suggest for you MeiHua to use previous zones as your TP and initial stop losses.