Stop loss

hi all, cowabunga sysem

when an entry signal is observed when is the best time to place your stop-loss? because after you have seen the entry signal (according to whatever system you are using) by the time you place the stop loss, you may have already lost some pips therefore money…

thanx for any advice

hi, you could use an order with the stoploss and take profit levels already set up upon entry (depending on which broker you use), but I find it easier to enter a trade and then set the SL and TP immediately afterwards. Just a personal preference.

Remember you have lost some pips on just entering the trade. Everybody looks at this differently. Do you want to place your stop 10 pips below the break even point or do you concider the spread and place you stop below that?

I say put it in as soon as possable. Most important abound news release times and when you leave your computer.

Its funny you should mention stop loss…I was actually reading something on anothe forum about it, and its something I have never heard before. Its called a stop entry loss???
Question about limit orders - Forex Currency Trading Forum

From what I understand
"Stop entry orders operate on a rationale that is the opposite of limit entry orders. Stop entry orders are orders to enter the market at a less favorable price. When buying a currency pair, the stop entry will be placed above the current market price. When placing an entry order to sell, the stop entry order will be placed below the current market price."

Using a stop to enter is exactly the same as using it to exit. Traders are just so used to thinking of them as stop losses that the entry part is forgotten. You use them to enter on breakouts and breakdowns, and stuff like that.

The difference betweent a stop and a limit is that a stop becomes a market order when the price gets hit, so there could be slippage either way on the execution. A limit is an “or better” order, so the slippage could only be favorable.

thats right of course there is the spread to factor in aswell!!

You should always determine your stop loss before you enter the trade. Once you determine where to place your stop you calculate how many pips large the stop is. Yes add your spread. Pretend 30 pip stop including spread.

The important reason for knowing your stop ahead of time is for POSITION SIZING.

I read somewhere on here that you guys like to risk 1% per trade. I do 3, but 1 is good.

Assume $10,000 account. 10,000 * .01 = $100

So for this trade you are risking 1% aka $100.

This is how much equity you would lose if you were stopped out for the full 30 pips. Now, for the position sizing.

You take the $100 and divide it by the number of pips in your stop.

100 / 30 = 3.33 lots

But, you’re not done yet. You then need to divide that 3.333 value by the pip value of the currency pair you are trading. This information of pip value can be obtained from your broker software, or website.

So for example, let’s pretend we are trading USD/JPY.

The pip value of usd/jpy is .8223 for example. So,

3.333/.8223 = 4.0532

You position size is 4.0532 lots.

At 4.0532 lots, you would lose 1% ($100) after a 30 pip stop out.

I feel that it’s best to get your trade in first, then go back and set your limit and stop. In using one of James’s systems, (see “holy grails.”) once you get a signal, you need to react pretty quick. I already know what my limit and stop is when I pull the trigger. But, if I try to put the trade in and set the limit and stop at the same time, I can lose a couple of pips because of the action.



oh sure, i trade a system that uses NO POSITION SIZING too.

It’s an all-in stratagem that uses 100% buying power. Of course if you are trying to teach new people, you don’t want to get them anywhere close to something like that.

If you have never met the REAL james, you really should. He is on and his name is James16.

He is the guy that the babypips james is trying to be like. Not a big deal, just thought you should know.

POSITION SIZING is very important.

You should ALWAYS determine your risk and position size BEFORE you enter the market. It’s just common sense.

It doesn’t take a long time. If you have a calculator it’s even quicker.

Using a constant risk% and determining your risk before putting on the trade is the professional way. It is a way that prevents you from blowing your account because of greed or fear and incompetence.

You should never put on a trade without correct position sizing.

You should also not enter at MARKET. Use a limit order.

In trading you must be quick. Quick with your mouse, quick with numbers if you want to come out ahead.

You must determine your stop before putting on the trade otherwise you will not know how large of a position to put on to begin with. Think about it.

Yes, that is fine. But you must determine where your stop will be so that you may calculate your correct position size for your entry order. Then if you must do it in two steps, set the limit order for your stop after you have entered the market.

The point is you must know where your stop will be to begin with so that the correct position size is used for that particular trade.

Maybe I should clarify a bit. I will put my entry order in first. Then, immediately after the entry order is put in I place a stop and then a limit. But, I do this IMMEDIATELY after putting my entry order in.

I don’t just put an entry order in first and then an hour later put my stop and limits in. That would be account suicide.



greetings please i have a question ,how can i place a market order by placing an order at the upper limit for long positn and a lower limit for short position in the same platform,i.e assuming the upper limit is 1.2000 and the lower limit is 1.0500,how do i place my stop loss and target profit at the upper limit and also sl and tp at the lower limitis it possible in the same platform

It won’t be a market order.

If price is at 1.0200 and you want to buy at 1.0250 a limit order would have you filled immediately (1.0250 or better). So you would use a “stop limit order”, also called a “buy stop”.

Different brokers call them different things.

Conversely, a sell stop limit would let you sell at a price below current price without being filled at current price.

Otherwise maybe you are asking how to straddle. Different brokers have different order types for this.

Otherwise you may be talking about hedging, not all brokers support this.

thanks mr professorx thats what i really meqn ,i need a good straddling technique with the scenerio i just gave before how can do it so that any where the market goes i will ride with .
thanks 1nce again for the advice about hedging,i was about asking that too!
please i am eagerly waiting for your advice .

call your broker an ask 'em how best you could straddle with them. You could always place 2 stop limit orders.

Hey okeyz, why not set straddled orders 8 pips apart at a certain time of the day when volatility is high?

sydney just opened. let’s see wehre the australian dollar goes.

This trading log calculates position size for you.

You input your entry and stop loss before entering the market, and the sheet tells you how large your position should be.

The sheet doesn’t care if you’re long or short, or if you are trading the GBPUSD or USDJPY. It’s all good.

Hi, could you actually put that excel file as an attachment for us? :confused: :slight_smile: