Stop Loss and Target Profit

Beginner Questions Candlesticks, Chart Patterns, and Price Action
1

Hi,

When deciding to place your stop loss or target profit , how do you estimate how much do you set your stop loss or target profit? Example is the ATR is currently 25 pips on the daily chart and you are going long, how do you decide the value of your stop loss ? If I place it 25 pips below my entry, then where do place your target profit ? Would it be also 25 pips ? And If I do that, that risk reward ratio is 1.

If I want my risk reward ration to be 1:2, and the ATR is currently 25 pips on the daily chart, how many pips should I set my stop loss and target profit for a risk reward ratio of 1:2?

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2

How do you decide where to put your entry?

If for example you want to buy as price breaches the high of yesterday’s price action, you could place your stop-loss around yesterday’s low.

3

Hi @kumarafaith77

Do you have a trading strategy that you have tested?

This would determined your entry and take profit.

If not, can I ask how do you decide when to enter what’s your trading plan?

4

It all depends on the situation.
There are no clear rules.
But you have to use it.
You have to use it.

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5

That’s right. A trading strategy determines how serious a trader is about their money. Every trader should have one at their disposal.

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6

There are no hard and fast rules in the forex market. But just make sure that you choose a strategy in accordance with your trading requirements.

7

What’s your idea of a trading strategy if I may ask?

8

I’m a fan of developing my own strategy for most trades. What strategy do you use for trading?

9

Depends on previous market structure for me which will also help guide me where entry should be. Always know in advance where entry and SL will be. TP for me is more fluid but I set myt targets again based on previous structure.

10

One that gives me a positive expectancy applying probabilities to increase my odds consistently. Mainly, indicators sequentially meeting conditions with a a discretionary overlay to increase odds further.

11

I usually go with price action but I have also tried my hands on day trading and range trading. The broker I use (Turnkeyforex) are pretty okay with any strategy so that works for me. Good to know you work on your own strategies.

13

Hello @kumarafaith77,

You may want to check out the topic below regarding stop loss and take profit levels. You might get useful tips from other members aside from the replies you would be getting from your topic.

Pipzilla :coffee:

14

For me it varies as per the market condition of the time. I really do not believe in having a rigid tp and sl.
Markets are forever changing and so it only makes sense that out trading strategies should continually be tweaked too.

15

I don’t think that my trades are ever complete without the use of stop loss and target profits. This doesn’t only make it easy for me to limit my losses but is also easy to calculate. I use simple formulas to calculate them and set them in place.
Take Profit = opening price + price change in points.
Stop Loss = opening price – price change in points.

16

I would like to find a nice simple pip value calculator, where you enter pair and lot size and it tells you the price per pip

17

stoploss is the whole idea of trading,you’ll struggle for the rest of your life until you find the holy grail ,so enjoy the process.good luck

18

If there is a question how to decide where to put the entry then it’s worth to follow your personal strategy which you created for the particular assets or maybe group of assets. I guess that strategy is the main thing for every trader it tlls you literally everything, where to enter, where to exit and if it really worths to enter a position or not. Of course, the main weapon of a trader is his ability to conduct technical analysis if he/she fonds of shor-time trading. This analysis tells him/her where is the best entry point. You see double top/double bottom? Then open a position and wait for the trend reversal. There are various instruments to determine entry points.

19

Stoploss is really determined by a key support or resistance level. You want your stop to be positioned slightly beyond that level