Do you adjust the distance of your stop loss based on different timeframes?
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If you look at different time-frames to make your trading decisions, make sure that the position is managed according to your target time-frame. The target time-frame will not normally be the longest time-frame you consult.
For example, its not likely to be good to draw a stop-loss level from the 5-minute chart if your intention is to hold over multiple days, and vice versa.
Remember you are not obliged to look at charts drawn from different time-frames.
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i need my stop-loss to reflect the volatility, so “yes”
i always put my stop-loss just below the last swing-low for a long entry, and just above the last swing-high for a short entry, in other words letting the price action determine where it goes
stop-losses should reflect the volatility, and that’s my way (i think it’s the best way) of doing that
stop-losses which are a multiple of the ATR are commonly used, and that’s another, different (maybe not so good?) way of reflecting the volatility
the mistake to avoid is “using a set number of pips” without taking the volatility into account, IMO
the important point, however you look at it, is that your stop-loss should go wherever you WANT to be taken out of the trade if it turns out that the entry was a bad one (and we all have some bad ones, so you have to have a way of allowing for that)
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What they said ^^
I will add that spreads widen considerably at the NY session close, as well as just before an important news event, so it’s best to keep your SL well out of the way. If price is sitting too close to my SL before the NY close then quite often I will remove it. Just don’t forget to put it back once spreads are back to normal.
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I focus on my T/P first and foremost, otherwise i would be sending a trade out into the unknown, which to my mind should be the target to reach. S/L then comes second…
No way am I going to stay watching a desktop FX trade for hours on end.
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But steve, if you don’t identify your SL as you open the position, how do you know what size position you should take?
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Basically, I use a risk exposure as 0.2. lot size. I place the order, then when the profit and loss points are shown on the chart I manually move the T/P into place, usually just before the previous retracement candle followed by doing similar with the S/L. Most times it’s around $30 for each.
In other words, I fit the T/P first, based on the price action I think it will reach, then followed by placing the S/L.more or less equal distance in the opposite trend direction.
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Adjusting the distance of your stop-loss order based on different timeframes can be a valid risk management strategy. Generally, for higher timeframes, you might consider setting wider stop-loss levels to allow for larger price fluctuations, while for lower timeframes, tighter stop-loss levels may be used to limit potential losses in volatile market conditions. The specific adjustments depend on your trading strategy, risk tolerance, and the market conditions you are trading in.
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I don’t adjust stop-loss according to different time frame. The most habitual way to adjust is to calculate the risk/reward ratio, where 1% of margin goes for potential loss, and 2-3% for reward.
Another method which I frequently use, if it goes to bullish position, the SL is set a bit below the support level. If it’s about bearish position, then, apparently, the SL is set a bit above the resistance level.
It’s a classical way and I didn’t want to invent something new, actually. It’s way more usual for me to use something already developed.
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My stop loss is calculated on the high/low of the previous couple of candlesticks and not on the timeframe. When using this method then the stop loss will be greater on a higher timeframe due to the greater range seen in one week vs one hour.
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I adjust stop loss according to the timeframe I am used to use.
If I trade on the H1, I don’t set stop loss according to the picture which H4 reflects. I presume that it’s very important to work strictly on that timeframe which is habitual to use.
It’s not bad to check bigger timeframes to “touch” the overall market’s sentiment, you know, to see what is happening with the price on them. At the same time, SL and TP should be adjusted only on that timeframe you usually use, where technical analysis is run.
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