My advice would be to stay away from a fixed pip SL.
Use some kind of analysis to identify a SL
determine your risk% per trade
multiply your risk% by your account size to arive at a dollar risk
divide the distance from your entry to sl by your $ risk to determine lot size
Good luck and happy trading to you
Its when the big boys drive price to certain levels in order to trigger as many SLs as possible, then drive price back to the desired direction.
Its not so simple as this. Stops are not deliberately hunted, they are just triggered when the big players drive price to where they need it to be for their own game.
Your right that stops may not be deliberately hunted, but the big players know that by driving price to certain levels, many stops will be triggered along the way, which helps their cause.
Regardless, even if they do hunt for stops, they couldnt care less about a retail traders individual position because our stops are just peanuts to them.
fixed number of pips for SL is inferior method and bad idea
itâs usually much better to base SL distance on recent resistance and support and volatility
Have you ever thought that it might just be that liquidity just drys up for that moment. The big boys donât have to drive anything. They simply withdraw their offers for even a second and all sorts of crazy shite happens.
Weâve all (well, most of the retail traders) come to the agreement and understanding that when you trade as a retail trader you are not trading the âmarketâ. Your trades do not hit the âmarketâ. The market is out of reach as a retail trader. Retail traders [speculators] are placing a bet with the retail broker. Only a small handful of well funded retail traders have access to the market - no disrespect, but those people are not here at BP in the whole [perhaps a few]
So how on earth are all these comments floating around that the âbig boysâ are hunting your stops as a retail trader? The logic is broken - the big players are in the market, you are not?
What you have got to worry about though is your broker hunting client stops, in some instances - different to the âbig boysâ
The logic isnât completely broken, because the prices of the smaller indirect markets are still derived from the interbank market.
Technically, many retail brokersâ prices are derived from a collection of liquidity providers, which are a kind of âin-betweenâ market, not exactly the same as the interbank market, but very dependent on it and moving in tandem with it.
Yes, they are, if by this you mean brokers making there own markets for there own clients (which is why most, if not all retail brokers show different raw quotes for the same currency pair at the exact same time)
But this is a one way process - the retail traders âtradesâ are not passed back to the liquidity providers - so the connection is broken? There is nothing to hunt - the only middle person who âcouldâ hunt is the retail broker themselves. As we already know, the only time a retail broker may pass orders to the market is if they have a net aggregated exposure [very different from individual retail traders suggesting that they are being hunted by the commercial players].
Some are - some arenât. You canât tell, can you?
Not all counterparty brokers have anything significant by way of liquidity providers, either. Some are outright scams. And to that extent, youâre right.
I simply mention that itâs a very variable and unmonitored extent.
I donât think we need to even know who is and who isnât - because any broker who has a business plan will make this a priority of settling bets in house. The transaction costs of passing to market make no logical sense when they can generate profits by settling in-house [which is totally acceptable and openly discussed, itâs ethical for both the retail broker and net-neutral for the client]
I can guarantee you that 95/100 retail brokers will not pass to market, at all.
So this brings us back to the question, do the big players really stop hunt retail clients - itâs highly unlikely, until you can afford DMA, many obviously canât.
Lets not forget that we are also plain stupid and place our stops in dumb places.
Then again some people canât take ownership of their decisions.
ICTiot M Buy and use my system
Minion Yes sir and I did. But when I placed my stops they got taken out. I want my money back.
ICTiot M Thatâs not the system, thatâs a practice called stop hunting. Just widen your stops some more.
Minion Oh, how foolish of me. Here is more money for sharing your wisdom.
I think thatâs the real answer - always looking for someone to blame!
However the hocus pocus retail myths are always going to be around, at least to some degree 
Itâs âlegalâ, certainly. Whether itâs âethicalâ varies considerably and is a matter of opinion anyway. I wouldnât say that misleading customers about who theyâre really betting against is very âethicalâ, and neither do regulators, when this issueâs commonly discussed. (FXCM, anyone?).
[quote=âRISKonFX, post:32, topic:68965â]I can guarantee you that 95/100 retail brokers will not pass to market, at all.
[/quote]
Iâm cynical about the industry but even I wouldnât put the figure as high as that, from my own previous experience and general impressions. This is hair-splitting, though.
Highly unlikely (at least) that they do so on an individual basis, but collectively, they certainly do. They know where thousands of stops will be bunched and how to take them out. In the trade, thatâs part of âscalpingâ, more or less.
Which then brings us back around to @_bobâs point about placing stops in the wrong places
Itâs always going to be âswings and roundaboutsâ - although iâd certainly favor the error laying with the trader, not the market hunting them intentionally. The retail broker hunting them, far more likely, if they wanted.
See it depends on your knowledge about SL, I like to put the SL as per earning of my PIPs. So if I have 20 Pips target, I will go to 40 Pips down for the SL.
Itâs a very bad approach.
Youâd be much better off determining your stop loss from the chart, rather than making it a fixed number of pips.
A fixed number of pips isnât going to be related to volatility, support or resistance - all the three main things you should take into account in determining targets and stop losses.
Agree with all of this.
Determining the size of the SL in pips from knowing the target size in pips to start with is a hopeless approach, for lots of reasons.
And wanting a 40-pip SL for a 20-pip target is also pretty bizarre! 
Thank you for the feedback. Point well taken.
Hello RiskonFX
You are correct that I dont have access to the âreal marketâ because im small potatoes.
However, my question is this⌠I understand that the market im trading is engineered by my broker and my trades go thru them. But isnt the market that a broker provides to retail traders a highly correlated derivative of the âreal marketâ in a sense?
Im sure there is a difference between the actual market and brokers (and even a difference from broker to broker) due to a number of variables like volume, liquidity, etc. But even if the real market and a broker engineered market arent 100% correlated, isnât there still a significant correlation? And wouldnt that mean that price movement in the real market still indirectly affects retail traders?
Am I way off the mark here? Any insight or feedback would be appreciated.
Thank you