Hi all,
I’m developing an expert advisor that work on time frame daily with some techincal signal in this time frame. In your opinion what is the correct take profit and correct stop loss for daily time frame on major currency?
In your opinion 100 for TP and 50 for SL is too small? is better 200 for TP and 120 for SL?
I think that in daily time frame, if I use small TP and SL, I get some false signal? is true?
best regards
Have you ever considered factoring in ATR?
Sorry, I’m a newbie… Can you explain better?
regards
The Average True Range or ATR is used to measure volatility. It is explained in the Babypips School:
(on this website: /school/high-school/trading-breakouts-and-fakeouts/ways-to-measure-volatility.html) and how to make use of it while setting a stop loss (/school/undergraduate/senior-year/setting-stop-losses/volatility-stop.html).
You can also see how it works in the image with the ATR(14) window attached: the yellow zone has small candles, which means low volatility. When choosing a stop loss, you can keep it smaller. The red zones, however, have large candles and the price is moving faster there. You’ll want to choose your stop loss wider there or you’ll get stopped out too soon.
That is a very very broad question. I think you should look at what kind of conditions you will be trading in and see what works best. For instance some markets do not make more than 30 points of movement a day while others makes 100’s.
