There seems to be a minimum number of pips above or below the entry price from which a stop loss will be accepted. Too close and the stop loss is rejected. How many pips is that? If not a constant, then what are the variables that determine the number of pips?
well it depends on where your spread price goes too. you dont want it too close becasue ti wil just close too quickly, if your watching it anyway theres no need to place a stop loss.
Thank you for replying. There are times where the candle pattern for a continuation only suggests a stop loss of 5 pips. I’m new to this but my understanding is that the spread is never that large. And the smaller the stop loss the more dollars per pip we earn if price moves favorably. I’m doing all this in demo. It just seems that sometimes I have a hard time getting a stop loss that close. I understand we can’t take a stop loss within the spread but maybe the spread is sometimes larger than I anticipated.
no you earn the amount by the lot size you use, all you are doing is minimising the risk against your account whicvh enables you to use a higher lot size. but always remember the market movers can easily east up a 5 pip stop loss if its set in the market. as its an order waiting to be filled. your better watching it and having pips in mind when you will close it then do it manually
I appreciate the response. Thank you.
It is my understanding that for a given account size and risk%, that the dollars per pip in reward is higher for a smaller SL than for a larger one because the lot size is larger for the same dollars of risk. And if one subscribes to a 1.5 TP level, then the number of pips to reach the TP is fewer. Our dollars risked remains constant with these givens regardless of the distance of the SL. I understand a smaller SL may get stopped out more frequently of course.
I don’t typically find continuation candle formations that suggest a 5 pip SL. My question really was one of curiosity as to why I could not sometimes set the SL that close if I wanted to, wise or not. I suppose your reply that my order needs to be filled first may be the reason preventing my SL being set. I use Instant Execution so I’m surprised that I need to wait to be filled (assuming my order is within the bounds that my account size can support). Perhaps it is that important circumstance that I needed clarified.
Oh you always need a stop loss, because anything could happen power surge, computer crash, site goes down, then your losses could become larger than your account balance always protect yourself as much as possible a 50 pip move in 2 minutes could wipe you out…
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I see you have become skilled at this. I’m not nearly as skilled. Maybe someday. Right now I just trade from 8:00 to 11:00 EDT, the four major pairs and on a 15 min time frame. I’m happy to not be tied to this into the late afternoon. I have lots of time to learn.
My original question was not so much about when to set a SL It was just curiosity about why sometimes I could get a very small SL and other times not. Thanks to you and others who generously responded I think I have a better understanding.
As far as I’m concerned this post can be closed as resolved.
The case don’t trade.Be patient,you must waiting for opportunity next time.
Don’t chase ,beacause it need large SL.
This is a relevant question to understanding how your platform works. But I have the feeling that it comes from a position where losses are being feared and to be avoided at all costs.
The TA should tell you where to set the stop: the position size is then adjusted according to the distance between the entry and the stop in order to manage risk.
There is no long-term advantage in trying to eliminate losses by using tighter and tighter stop-losses.
There are stoploss limits set by your broker. You cannot go beyond such limits. You must also set your stop loss in line with the money you’re willing to risk for that particular trade. Lower magines allow you to set wider stop loss. Also take note of the behaviour of the currency pair. Some currency pairs are notorious for wide sparks (moving up and down in a relatively, ranging pattern). For such currencies If you place your SL (stop loss) too close, your potentially profitable, trade will be stopped. So please, consider these points.
Good luck!
I think that you should discuss this question with your broker. Usually, due to market volatility, you need to leave at least few pips, otherwise, your position would be immediately closed. Also, it depends on your loss absorption potential and generally your trading strategy