Great reply, as usual tommor. If I decide to start using them again maybe I just leave them alone and not move them up. And I’m sure you’re right, this probably happens due to a price surge, then I get stopped out on the retrace. More patience or just exit the trade.
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Hi matty,
Sounds like a frustrating time! Personally I move stop losses to breakeven asap, if the market doesnt move straightaway, i dont want to be in it when it reverses lol.
I think the answer could be as simple as test both strategies out daily or at the end of the week. That way, you’ll know for a fact which one regardless of whether stop is at original position or at breakeven is profitable. Just keep a record of both going forward and if ever a time comes where the market is more whip sawing you’ll straight away see that it’s more profitable to not move your stop loss to breakeven. I think having the conviction of testing the strategies will help your psychology to accept when trades go a certain way.
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Sorry to say Matt but at times you need to take profits. Without see charts its hard to advise on stop losses. Therefore I don’t know if moving stops to break even was the appropriate place to put your stop loss.
Perhaps if you post some charts then perhaps we can help you.
Just remember a profit is not a profit until you put that money in the bank.
Cheers
Blackduck
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Thanks for your reply.
I typically move SL’s to break even as soon as I can as well, but this week the market just seems to be out to get me, more than usual! Lol. Perhaps I just need to take a step back, my patience hasn’t been what it should be the last few days so yes, I need to work on me.
@MattyMoney, fear not the stop loss my friend for it can be a traders best friend.
I assure you that 99.99% of the tine if your SL is being triggered, there is no conspiracy behind it. Take it as a sign that your strategy may need some refinement.
Even if stop hunting exists i can guarantee you that as a retail participant in the spot fx market, our SL’s are meaningless in the grand scheme of things. With all due respect, we’re not even peanuts to the market makers, we’re more like subatomic particles to them. They have bigger fish to fry, retail traders are just collateral damage to the big boys.
Keep at it my friend. Best of luck to you.
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You are right however most of the time retail traders are placing stops in the same position as bigger players in the market like small hedge funds small pension and superannuation funds and it’s these stops that the real big players, the market movers, are hunting.
How many times do you see that price runs through a major support or resistance level only to reverse. It is the market makers that are triggering breakout traders and trapping them into bad trades.
It’s all relevant.
Cheers
Blackduck
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@Blackduck, I have to admit that you make a great point, however I would counter that major s/r levels are broken all the time.
And how can we be certain that the major players are setting their stops at the same levels we are? Can we be certain that the big boys are even using stops?
Price is never wrong tho, maybe there is a strategy that takes this into account, in essence turning what we would consider SL levels at obvious major s/r levels into potential entry zones instead?
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Yes true. I am a price action trader and I really take note of price action at major support and resistance levels. What happens there can lead to some profitable trades.
Happy Trading
Blackduck
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Hi everyone!
100% true, Forex trading is unpredictable and highly liquid market. That’s why stop loss is the best way to decrease loss size. It’s better to set stop loss which can overcome easily or according to your capital.
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It sounds to me that your main problem is not the stop loss, but an exit plan, which involves also the take profit.
What is your strategy? Place a stop loss but not a take profit? Then what about when you have a profit? Just move the stop loss to break even so you have the illusion that you won’t lose anything? That’s just an illusion. If you were up $300 and you close the trade at 0, you lost $300.
My main suggestion is: have a plan.
I trade with several strategies. I want to talk with you about one of them. It has a kind of trailing stop (executed manually, each x pips), it doesn’t have any take profit and it aims to catch strong trends.
Sometimes, it can be frustrating when the price is in a range and you see 3-4 losses in a row. Other times, like yesterday on GBP/USD, it works perfectly and I made an amazing profit, getting the best out of the up-movement, since I don’t have take profits, I just let it go, following the rules of the system.
The point is: why am I not frustrated when I see I have a profit that turns into a loss or breaks even? Because I have a plan. The system has been back-tested since 2013, forward tested for one year. I know it works and I constantly work on it to have a plan B, if market conditions change. When you know that you have something that works in the long period, you just have to sit tight during negative periods and wait for better ones.
Have a plan, my friend. This post will only be a distant memory after that 
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Thanks for your reply.
I agree, my strategy needs to be tweaked. Currently my strategy is based on catching a trend then scaling in multiple positions. This is where I’m running into trouble as every time I open a new position I move my SL to break even so that I don’t have multiple positions running at a loss. So, I’m going to leave the scaling in part behind and focus on 1 longer term trade.
As for an exit plan, most of my trades are based on TA and price patterns on the daily and weekly TF’s, but for the most part I just close when there’s decent profits regardless of where I expected the trade to go, which it quite often ends up there eventually. So again, it goes right back to patience and self discipline.
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Matty, take a look at this post. Perhaps this is what you’re missing?
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So I’m revising my strategy and I’m pretty excited about it. My main focus will still be on S/R levels and patterns, but I’m adding some indicators to see if it’ll help confirm trends as well as changes in trends.
I’m not used to using indicators. Some will be modified and I’m sure one or two will be dropped, I’ll know more in a few days/weeks.
My strategy for entry is:
- EMA50 should be above EMA20 for downtrend (poached this off tommor
), opposite for uptrend (Duh). - XLV4 (color moving average) must be red (down) or green (up), obviously.
- Stochastic crossover and confirmation further down (or up)
- SR levels and chart patterns must be respected.
I’ve marked my ideal setup in the above chart. Further, before entry it is always wise to look at the 4H and 1H time frames to make sure you’re not entering a short at bounce on a support level or trend line.
I know I’m missing some things, but I’ll tweak as I go.
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I would also caution you against trading GBP and its related pairs. GBP is a nasty currency to trade, IMO. I never trade them. The only exception I make is GBP/JPY and I trade that only occasionally when I spot A+ opportunities only and with great care, using conservative risk and lot sizes. Did you see what the guppy did yesterday after close of market? I crapped my pants as I watched it speed range nearly 300 pips for quite some time. Thankfully I was not in a trade in the pair.
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Oh I saw. The market in general got pretty crazy with the election results and Trump confirming phase 1 of a trade deal with China both at the same time. I watched a couple trades sink and a couple skyrocket. Fortunately everything corrected itself overnight, made some good money on the retrace.
Use them but when you trail your stop losses near break even take a partial profit. You can always make another entry at the next impulse move but get 70-80 of your money before you trail your loss. That way, even when S/L gets triggered you end up net-profit.
I’m also figuring massive wrong trades lately and I also thought my broker is trying to mess with me… But it’s August…
Well don’t quit using stop-losses. You should see stop-losses as hero who saved you for bigger losses. Try trading by using at least 70 pips SL and currency pairs with smaller spreads
I’m not an expert, but here’s some food for thought that I’ve picked up during my education.
According to some, institutional traders can actually see the pending orders in the market. And, yes, because their positions are so big, they need to trigger these orders for their own liquidity purposes. So, you might not be a conspiracy theorist after all.
Next, placing stop losses is a learned skill and it is as important as any other aspect of trading. In placing an SL, we need to make sure we are accounting for normal volatility in the market. If your stop is too tight, it is pretty much guaranteed to get triggered.
I’m going out on a limb when I say that there is something strange in the way you approach SL’s. I think you need to question the way you execute this part of your trading because, frankly, there’s something fishy going on here.
Just me thinking out loud but what is causing the “trigger” at the SL?
Is the pips for the SL or the spread that cause the trigger?
Let your winners run is good in theory but not always works. I use stop-loss and take profits but always monitor my positions closely and if I’ve made decent profit I exit the position manually even if it hasn’t hit my TP. I feel it’s safe to have a mental SL and TP as long as you know you won’t let your emotions come in the way. Alongwith that, use automatic SL too but slightly away from your mental SL.