Hey
For scalping , day trading - how close can you set your stop loss ( say on OANADA)
I know loads of you will tell me not to put it close as it will get spiked and ill lose the trade - but forget that for now.
How close can the stop loss be set without looking at the S/R levels for trends for trend levels ?
You can put it as close as you want. You can make it so that once your trade is made, if the market goes 1 pip against you, you will be stopped out. Having said that, if you want to make trades as a scalper with real tight s/l and high reward/risk ratios, then the best thing would probably be to put s/l below low of previous candle or current candle.
My trades last usually 1h-1day at most, sometimes more though but, on each trade I use a set 30 pip stop on GBP/USD. I trade based off of S/R, I know for other systems you’ll need a different stop so it really depends how you are trading. I’ve heard 35 pips on EUR/USD is plenty and a little more for GBP/USD. Those are pretty good stop levels, if your looking to literally make it as close as possible I think it is within 3 pips of current price for MT4, not sure about Oanda but, you can always manually close the trade at the first negative pip.
It really depends on your trading strategy, one that I use is using the Bollingers and a form of counter trend trading using the minute charts. As I am only looking for a 2-6 pip gain 2-4 pips is my stop. Taking a 30pip loss would be suicide, always way up risk for reward. I use manual market execution on this strategy
I sometimes use other strategies like the one on Friday with the Euro where I had a 60 pip stop loss in place, from that one have taken a 40pip profit and back in with 80pips up. This trade I used an anticipation on a bounce from the monthly chart lows.
Work out your risk reward, by asking others without giving your particular strategy the answers will most likely not suite your style of trading, as you can see above two strategies used with two totally different stop loss systems
It depends on the pair and the spread. But why would you want to have your stop loss as close as possible? You’d rather make your broker rich? Wait I’m confused. As traders, we want to make money and not wanting to give our money to the brokers right?
If your stop loss is 10 pips and price moves in your favor by 20 pips, that’s 2:1 reward/risk
If your stop loss is 20 pips and price moves in your favor by 20 pips, that’s 1:1 reward/risk
In a purely theoretical sense, reward:risk increases as stop-outs increase.
true, i personally think any stop thats more than twice the profit is bad MM
right, very confusing…
To start, for a trade up, put your stop just below the previous higher low candle. If there is not a previous higher low candle, don’t take the trade. Do the opposite for a trade down. If that requires more than 20 pips, do not take the trade. Move the stop to break even when you are 20 pips ahead. Take profit at +40 pips for a 1/2 risk to reward ratio. Don’t trade less than M30 time frame. Trade this in demo until you get the hang of it. If you have a better system, use it, but don’t deviate from it. Never move a stop to stay in a trade. Never. Ever.
Happy Trading
Tight stops are tricky. You want a tight stop to limit your loss and allow a larger trade size. The trade off is more losses you must have a very high probability entry to make this work. That means many hours staring at the charts to find the perfect set up. It can be done look at the cat and mouse thread. I would guess you are trying to make a large size trade for a few pips with a limited risk. The goal would be to grow your account as fast as you can.
A good goal. Very hard to pull off for many reasons. If this is your goal you need to look at all the problems that can happen with this kind of method. You need to address them specifically. Spread, broker execution, time available to trade, time of day available to trade, losing trades, R:R, and on and on. All of this stuff needs to be looked at in the context of what is going to happen in the next few minutes. Most of the advise against scalping is good. If you are going to give trading like this a serious try you will need to get creative and perhaps break some established rules that make sense on a higher time frame.
Any new method should be tested on demo or a tiny micro account;).
I agree with everything you said. I was just trying to get him started. As I understand it, he is trading demo. I will add that if you want to spend less hours in front of the computer, trade the 4 hour and daily charts. Many new traders resist this because they have to use wider stops. They don’t realize they can reduce their position size proportionately to control their risk with these larger stops. To me, the pip gains seem more than proportionately larger, but that may be just because I have much more time to think a trade over, so I tend to make fewer and better trades.
Happy Trading
Graviton
You said there about moving the SL to break evem and take
Thr trade at say 3to1 risk ration.
What happens if you haven’t set a take profit and your looking to
Follow the bullish trend - Can you keep moving you stop with the
Same 20 pips SL until you see the move levelling out?
Tjanks in advance
Forex wales
That would be a great trade. After you have moved your sl to break even, you have protected your trading capital and you just want to maximize profits. You can experiment with different systems, but a simple rule is to never give more than 50% of profit back.
With the stop loss, when your trade goes well, I guess braking even means covering
The spread right?
Yes, you at least have to win the spread to break even. But your first concern should be to protect your trading capital. Sure winning enough to cover the spread is a small part of that, but there are many other issues like position size, diversification of trades, and other money management concepts you need to learn. For instance, if you decide a 40 pip sl is needed for a good trade you should take, say with probably a 100 pip profit or more, but that is more sl than you usually use, you can take the trade with 1/2 your usual position size to control your risk. But how do you know ahead of time it will take a 40 pip sl to stay in the trade, or how can you know the trade will probably make 100 pips? There is a lot to learn, but first and foremost, learn how to trade while protecting your trading capital. Once you have that really down, profits come effortlessly. So that’s what I’ve learned, profits are easy, protecting your trading capital is the hardest part of this business.
Happy Trading