I’ve recently started trading properly. I say properly because I’ve been ‘trading’ for a couple of years but in all honesty I did every newbie thing on the list and thought I was doing the right thing. Recently I’ve wanted to take it very seriously and the research I’ve been doing has show me that I’m lucky to still have an account!
I work full time so swing trading forex is the avenue I’m heading down, I feel it fits my lifestyle and personality the best (at the moment anyway).
I’ve been demo swing trading daily forex charts using a pull back trend continuation strategy and setting my target 1:2 R:R from my stop unless I see any obvious S/R levels
My question is, is there another way to set my targets?
I feel like I could be missing out on bigger R:R by always setting it to 1:2.
Hi, you need to research, which kind of exit position is the best for you, there are many possibilities, for example, Take profit, take profit calculate by ATR, trailing stop, exit after reach indicator/indicators value, exit after bars. Regards Greg
What are your entry criteria? I don’t think a fixed R:R ratio makes much sense. Use trend lines to look at where the next support/resistance is likely to be and set your target within that. Set the stop loss at a distance that’s unlikely to get triggered unless it goes completely wrong and let the trade run. Higher time frames are much more reliable.
Personally I have a strategy where I don’t use TP or SL, I use the charts to tell me when to get in or out and only make decisions over the weekend when the market is closed. The biggest flaw with this system is me second guessing what’s going on and not trusting the signals. Trust the system if it’s proven to work.
How about setting your TP at +2r, but put another entry order (same sized position and same SL) in the same direction at +2.5r or +3r - if price crashes through your TP level, you will have a “free” trade - and on the second trade don’t set a TP. Could be useful in highly volatile times like the present.