I was curious how others handled moving their stop losses to break even or if anyone else did this?
I have been moving to break even after gaining about 50 pips in a trade usually, but recently I have had 2 trades come back to stop me out at break even, only to later go on and hit my would be TP level. Is 50 pips not enough room to breath for the trade?
In my opinion the initial SL should be below the Valley or above the Peak by at least the Spread of the instrument being traded. When moving the SL to Break Even (BE), I let my trade go in my direction at least the distance equal to my initial SL distance and then move the SL to BE. Beyond that I close my trades when I hit my TP targets.
This approach is dependent on type of instrument being traded and the time frame being used.
Break even system is helpful if we can use it by understanding. When our trade able to get profit we can set our stop loss in break even position. Break even position is near at trading position where i trade start. So when we want to set it we should know well before it’s using.
[QUOTE=“poopoopotato;693151”]I was curious how others handled moving their stop losses to break even or if anyone else did this? I have been moving to break even after gaining about 50 pips in a trade usually, but recently I have had 2 trades come back to stop me out at break even, only to later go on and hit my would be TP level. Is 50 pips not enough room to breath for the trade?[/QUOTE]
I move to BE when a new low/high and subsequent pullback has been established.
Sometimes I never move it because there is nothing to hide behind.
I’m confident enough to stand in the fire and take some heat.
I don’t guess. I only make bad/good decisions.
it depends on your trading method.
Either choose something randomly arbitrarily (so it doesn’t affect the outcome of a series of many trades except psychologically) or choose based on statistical evidence in favour of a particular approach.
If you use something like breaking S/R levels to move SLs, it might be dangerous because that’s not arbitrary (i.e. in the sense that everyone is seeing the same S/R levels) and it either works in the long run or it doesn’t, and if you aren’t sure it might be working against you.
And the thing about trading is, what works against you on one time frame might work for you on another. What works against you in one trading method might work in another. So don’t take things for granted.
There can not be fixed number of pips in numbers for all the traders because each of the traders trading ability may vary and also their risk management may change. But i feel that 50 pips is quite decent enough for my strategy.
Move your stop to break even only when the level that would invalidate the trend moves to break even. That will seldom be a fixed number of pips.
-Adrian
Stop loss should be at a level when price will reach there your setup will be reversed to you. For long term trading 50 pips BE may not a good idea. So it depends on your strategy.
Suppose for me if I buy an instrument for long term I keep the stop loss same until that instrument gives a retracement before reaching my target. If it gives retracement I move that sl below the new support or low created by that retracement.
moving to break even is great. market has big moving in the news. we can trade with this strategy in the news. i usually refer the analysis of my broker liteforex. i will define the break event. it is good
Are you sure you’re setting at 50 pips?
A lot of brokers show 50 but it is actually only 5 because they are basing on the 5th decimal place, which is only 0.1 of a pip
Definitely 50 pips. I use Oanda for my broker and mostly trade daily charts. If it was 5 pips that would really underestimate the volatility of the market. I stopped using a fixed number for break even and try to read price action clues more. It’s very discretionary, but I move to BE when I see a new top or bottom or some small support or resistance that could keep me from my profit target. I’ve also closed some trades earlier rather than move to break even if I think the trade will turn against me. For example I’ve noticed that Friday US sessions tend to go against me frequently so I’ll get out of my trade and avoid holding over the weekend if I am up on a trade.