I was curious to know how traders on this forum set there take profit and stop loss lines? Do you determine it based on your account size? One thing i am personally struggling with is either setting too wide of a stop loss from my entry point or setting it too close. Is it better to have a slightly wider stop to give your trade more breathing room just in case it goes slightly in to loss before going in to profit or is that the wrong mentality should you cut losing trades straight away?
Set the distance to your stop-loss according to the TA of the strategy and particularly the entry signal you are using. Then check that it is not so close that it will be hit by ordinary volatility which does not negate the TA which you used for your entry. Then adjust your position size so that the total capital at risk is only a small acceptable percentage of your account.
Take profit levels should also be set according to the TA of the strategy and especially the entry signal. For some strategies such as following a string and consistent trend, there may not be any place to sensibly set a take profit level: in such circumstances, consider pyramiding your initial position and moving stops to follow the price action and protect profits which are likely to grow further rather than take them out.
Thanks for your reply. I am currently demo trading on IG and on there platform it states there’s a 50% chance of slippage. With that in mind am thinking of using a guaranteed stop loss, does anyone else use it and also has anyone experienced slippage in there trading?
Slippage could take place time to time, so you nee to understand the situation when it is possible. As it mostly occures as the result of large price movement caused by news, the first thing you can do is to avoid trading at the time when news releases usually take place.
Another point is that you should place your orders at the level that should not be reached by the price according to your scenarion, otherwise you would need to close your position to avoid further losses.
I am asking question – how much can I afford to lose. I am trying to limit losses, so I take some relatively small percentage of my position into account. It is not always good option as volatility can lead to SL execution and then revert to right direction. But anyway, I still pursue this technique
I am posing inquiry – what amount would i be able to stand to lose. I am endeavoring to constrain misfortunes, so I consider some generally little level of my position. It isn’t in every case great choice as instability can prompt SL execution and afterward return to right heading. In any case, regardless I seek after this method