i am new to this forum but have enjoyed reading many of the posts and articles on the site.
i am beginning to trade on the 1 hour, 4 hour and day charts using simple price action and reversal patterns.
one area where i am struggling is the level of stop loss to use? i have been setting them at 50 pips with a limit order of 100 pips. Is this to much or to little?
the other question i have is how long should i be looking to hold the trade for basing my trades on these charts?
Your stop loss shouldn’t be based on the amount of pips/money you are willing to loose, the market doesn’t care about that, set stop loss a few pips away from the last significant swing high/low then make sure you take X2 of how much money/pips you risk…i trade these time frames too and i have noticed that most 1hr swing high/low accommodates 50 pips as stop loss but more in 4hrs, daily TF
there are different ways to set you SL.
Such as: the chart lows/highs, supports/resitances and averages, maybe the ATR… etc
I agree with kingtony; the market does not care about a fix pip-amount.
Think about to determine the possible SL out of the chart first, then adjust your position size, maybe…
This is only a idea, not a fixed rule.
I wouldn’t use specific number of pips for stop losses or TP’s. I typically place mine above or below previous swings and around support and resistance levels.