What do you think about moving the stoploss to breakeven?
I assume that this is necessary to protect my capital, right?
But…
Lets say:
I set 3 TPs. 1 TP hit then the 2nd and 3rd’s SL moved to BE. But suddenly, the price retrace back and hit BE, although it did not hit the previous SL. And sadly, after that… the price then slowly move and hit TP 2 and 3.
Is it better to take risk no to move SL at all? or just let the BE hit and move on (although its very annoying to see how much you can gain if you did not move the SL to BE, well at least the risk of being loss is decreased - better not making money than lose money?? )
When the account is in the red it seems sensible to try for as many trades as possible to be guaranteed to not lose money. Even if this means missing out on profits it’s better to break even than lose more money.
But if the account is in the black, be prepared to take on more risk. If the position is also showing unrealised gains and price is moving in a trend in the direction of your trade and the fundamentals are still with you, pyramid the position. And keep pyramiding it at each opportunity.
Hi, it depends on different factors in my opinion, strategy type, current portfolio of strategies , market which you are trading. Some markets and strategy type can be more profitable than others, you have to test it. According to portfolio, if you want to achieve better results ( I define better results as lower drawdown and stagnation period with higher return) you should use different strategies type, exit types, time frames, financial instruments Regards Greg
It all depends on the conditions of your trading strategy. That is, there must be conditions for transferring an order to breakeven (for example, the price has fixed above or below some significant level or left a flat and has consolidated above or below it), and not just transfer it to breakeven after a certain number of points. Only then will there be a greater chance that the price will not reach such a breakeven.
No one can tell how far the market would go. We make informed guesses with the aid of technical analysis tools and knowledge. That said, I would suggest taking partial profits off the table to lock in some profits when price has moved some distance in your favour. Only then should you move your stoploss to breakeven, and keep adjusting it as price keeps moving in your trade direction. If at the first attempt to adjust your stoploss and you are taken out of the trade by a retrace the fact that you had already locked in some profits should be satisfying in the least. In the end, it is better to be taken out of the trade at breakeven or partial profits than at a loss.
Hi,
You are talking about on a trade by trade basis, and I do think it is sensible to move the stoploss to breakeven. I use this in most of my trading strategies. However, it is rare now that I use leverage at all, and though I did not used to always practice risk management on a per trade basis, I took a life changing decision early Jan2024 and moved my entire trading account investment out of the portfolio.
I now trade only with profits accumulated since 2020, and it is a very comfortable feeling. It has taken me about 15 years to become profitable, and 100% of that has come from trading crypto currencies. I never made consistent profit with Foreign exchange over a period of more than 10 years. But the cumulative experience I gained has impacted my other businesses positively in terms of understanding relative risk management and funds allocation. Over such a long period the journey has been wonderful, and although I know I cannot guarantee that I will continue to make profit with my trading pursuits, I am very happy I took the journey, and now I have no need to prove to myself that I can master Forex trading, or stock trading. Those are reserved for the very long time periods like years.
I think it depends on the nature of the strategy you employ and the underlying reason for moving your stop to b/e.
If you swing trade/position trade then you might be better off delaying moving your stop to b/e until price has found a new base and breaks out from that new base.
If your a shorter term trader then a tight trailing stop might be the way to go.
Just make sure that whenever you move your stop, there is a valid technical reason for doing so. Moving your stop to b/e from fear of losing is not an optimal strategy in my opinion.
@Love88 well I’d said that before yhu move your SL to BE, yhu need to wait for the 1,2,3 move, i.e (Expansion, Pull~back and break of that your entry structure), before yhu can move your stops to BE. Cuz sometimes, the market usually make a deep retrecement to fill some pending orders. Thanks.
You are right. Many things to consider. I think perhaps it best to move my SL to BE when my trade almost reach TP or at least 3/4 on the way
Shall back test this later.
Anyway, Thank you for your advice.
Have a good day
Hi, I think that the best idea is to backtest your strategy: only in that way will you know it for sure! I was just considering the same thing for my strategy, I wanted to try to BE in order to prevent winners from turning into losers but when I backtested the idea… I had to change my mind! Definitely! Apparently, in my method prices tend to bounce to BE too often before reaching my TP, so I decided to let prices go. But I’m sure that if you use a different strategy you will find that closing at BE can be great. It depends.
Thank you very much for sharing your priceless idea. This is what I am looking for!! Its true price tend to bounce to BE before it finally reach our TP That’s why its such a dilemma.
My idea for now is only move SL to the place which if hit then my trade is not valid anymore. I have to fight my fear of loss, as I might have lots of it (hopefully not)
I relate! Same thing here. Just as you, I realized that the ony reason I wanted to move to BE was not because it was appropriate for my strategy but because I was afraid of losing. Hadn’t I backtested, I wouldn’t know that this was such an ugly idea for my system.
Have a nice day you, too!
,
