Hey everyone! Finding a stop loss while also keeping my 1:2 risk reward ratio is a big problem of mine. When going long I try to set a SL slightly larger than the ATR and around the most recent swing low. Often times when I do this my TP would have to be much higher than what I expect the price to rise to in order to keep my 1:2 risk reward.
Ex. I went long on the EURUSD once I saw and engulfing candle at 1.1144 and figured my SL would need to be about 28 to 30 pips, but I believe the price will bounce off the resistance at 1.1175. This is barely 1:1. Is this a bad trade or am I just not using a good technique to find and set SL/TP?
Its good discipline to set a stop-loss but why wait for price to reach the ATR-based SL? Surely you would monitor your trade and if TA turns bearish you could exit manually.
As soon as you exit manually, you could also set a new buy order above your exit where the probability of price gains would be at least greater than 50:50. So if you exit on weak TA and the trend ends, you’ve cut your losses: if you find you’ve exited prematurely, the TA generates a re-entry opportunity and you have capital on hand to take advantage.
Beware of putting great store in TP’s and s/r in trends. I don’t ever make entry/exit decisions based on these.
my pov
sl should be above a resistance line
or under a support line
take profit when a 50 EMA is crossed
up when selling
down when buying
(plus but not necessary price meets a support or resistance line)
