SL as swing trader

Trading Discussion
1

Hey guys!

As a swing trader, what was the “smallest” SL you have placed? On average, how many pips away is your SL from price you entered?

Reason why I am asking is, that I often get caught in setting tight SL like 50 pips (While aiming for 150) and after hitting my SL price goes the way I predicted. I know, that part of it may be bad entries in trade, so I would like to know your opinions on this, maybe I am bad at setting my SL/entering too early or both.

Thanks everyone for participating in this topic, once I am skilled enough to share my knowledge, I will do!

3

The classic swing trading SL is at the other extreme of the trigger bar’s range. So if your entry level is the high of a swing low bar, the SL would be at the low of that bar.

Of course, no two daily ranges are the same so you might also consult ATR and adapt that rule so that the SL is certainly below the bar’s low but also at least a multiple of ATR14 below entry.

Bear in mind that pips on different pairs mean different things. Right now the ATR14 for GBP/USD is 122 pips but on EUR/USD its only 67: on EUR/CHF its only 37. This means its irrational to use a standard pip distance between entry and SL on different pairs.

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4

Why is 1:3 rrr non profitable?

5

Try this trick: define an stop loss and before placing it, add a 50% more of pips to it.

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6

Your SL should go where you feel your trade has become void, according to your strategy.

If your strategy uses swing lows/highs (like tommor explained), or support/resistance, then you would put your SL above or below that level.

Here’s an example of a trade I’m looking at with Soybeans, using a sell stop order:

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This is on the weekly chart and requires a lot of patience. However, if it works out then I would see a nice return. Obviously, I’m looking for price to continue to go down, so I’ve placed my SL above that swing high, which matches up with a previous R level from 2016. Since I’m risking 1.25% on this trade then I’ve adjusted my position size to reflect that.

Or, CHFJPY:

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Again, it depends on your strategy. If you’re a trend trader then you’ll probably stay away from trades like these.

Good luck!

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7

Thanks for your input! I get what you saying, I just wanted to hear others opinion, because I found out that I am losing many trades because of limiting myslef with tight SL! Anyway, thanks for your point!

10

Good point, but consider it an investment. Sometimes the cost is well worth the reward.

11

I have seen traders confused about putting their stop losses. Remember, there is no particular number where you will have to put your stop loss. The only way of putting your stop loss the right way is to code it and try it out over a few years of data.