In first Scenario, 2% risk is on 30 pip stop loss. So when trade hit SL, on a loss of 30 pips you lost 2%.
But in 2nd Scenario, 2% risk is on 50 pips. So when trade hit SL, on a loss of 30 pips you lost 1.2%.
See 4th trade
In first Scenario, 2% risk is on 100 pip stop loss. So when trade hit TP, on a gain of 200 pips you gained 4%
But in 2nd Scenario, 2% risk is on 50 pips. So when trade hit TP, on a gain of 100 pips you gained 8%
Hope it is clear.
For better understanding, I request you to go through my mid-month analysis in my thread by clicking here
For every trade, stop losses will be different based on the market conditions, time frames used, recent swing high and swing lows. So it is very necessary to pre-determine (at least… just for me) the inwards and outwards based on the pips earned and lost.
Is the 2% risk determined on your account balance? if your balance is $1000, 2%= $20, therefore:
First scenario: your position size would be such to make each pip worth 20 cents? (0.2lots x -100pips =-$20 loss) is that how you calculate it? and of course 0.2lots x +200pips = $40 or 4% gain…I get that.
2nd Scenario: your pip value would be 40 cents so 0.4lots x -50pips = $20 loss, and 0.4lots x 100 pips = $40…4% …how’d you get 8%…or is it progressive based on the prior trades result pattern?
Of course. Risk is determined based on the account balance. Request you to go through ones in my mid-month analysis in my thread by clicking here
as it is explained very clearly there. and am glad to give any further clarification.
There still seems to be an upward trend (in blue lines), so I’ll follow the trend.
I’m thinking of not editing my pictures anymore, as I always put my lines color coded (besides, it take a bit of a time putting in those markings). Red horizontal lines are Stop losses, Green horizontal lines are Take Profits.
EDIT:
This trade met a stop loss at -70 pips, giving me a fund of -0.93%.
I guess I entered too early on this trade, or have set not enough stop loss for enough movement. I will need to setup a stop loss behind stronger (or more recent highs/lows).
After a few hours, this trade met a stop loss, giving me -0.92%. I should have never made this trade. The downward trend is still too strong as indicated by the MACD.
Hi I think u are heavily dependent on oscillators and try to pick absolute bottom whic only an experienced trader can do. in this case stochastic has crossed but are still in OS territory. if u analysed ur trades I think most of time u are trading against the trend.
It’s the contrary actually, I keep on forgetting about these oscillators. I purely based my decision on the movement of the charts. Now I’m in trouble :17:
I hope u don’t mind discussing things with u,ok why did u take the last trade on gbpusd? what does chart tells u.
I have a little example for u it may help u. since 2nd of jan, gbpusd produced six trades , six winners, but they are with trend.
Sorry for the late reply Nisar, I saw your post last weekends, but didn’t had the time to reply, and even look at trades.
I took the trade because of the MACD signal in my 4H chart. It was showing an uptrend.
I was well aware that the trend is downwards, but I was hoping that before prices moved downward, it should retrace a bit upwards, before proceeding down.
Should I not really do that? Most of the time, that’s what prices do, right? before proceeding to its general trend, it usually shows a bit of retracement, and I was hoping I could earn a bit with those retracements.
Here is a possible trade on AUDCAD. I have set a limit buy order on the white line, take profit is on the green line, and stop loss on the red line.
The possible entry is slightly above the fib 50%.
Here is my trade 24 EURNZD. There is a weekly up trend, and the prices have been confined in an upward channel (yellow lines). Hoping prices will again move upwards, I made this trade.
Green line is my take profit, red line is my stop loss, and white line is the entry.
I’m a bit worried about the resistance that is at the blue line (as pointed out by nisar on bijoy’s thread), but I think I’ll take the risk, as I have enough room for movement. This trade is still on 1% risk.
Here is trade 23, a sell on EURGBP. Prices seems to start forming a wedge. I’m hoping I could still catch some from the formation.
Yellow lines are the weekly trends.
Red line is the stop loss (118 pips)
white line is the entry
Green line is the take profit (222 pips)
Risk ratio is 1.88:1. The risk ratio is supposed to be a bit greater than 1:1 if I put the take profit slightly above the most recent low. But if prices were to form a wedge, there is high chances that my take profit will be hit since it’s in the middle.
Thanks for the confirmation Nisar! By the time prices moved that far, I would have put a trailing stop (around 80 pips) allowing me to take home some pips, if prices moved against me at that resistance.
I’m only using 1% risks on my trades, so if I’m stopped at that area, I will only be able to take only a few amount.
