Stop losses and win/loss ratios are one of the obstacles to overcome for inexperienced traders.i personally don’t always use stop losses .I guess most traders put their stops around support and resistance levels or a specific moving average.maybe with the help of the odd indicator hope not to sound too idiotic but if the above is true why not rip the text book up and put a SL where the loss is a.minimal fix amount regardless of TA you can always do another analysis’s of the trade later in the session or another session
Let me tell you my biggest issue as a new trader was cutting my trades short. It’s one thing if you cut it short and you were avoiding a potentially bigger loss that’s fine. I would cut my trades and 90% of them went on to take profit that really stung me internally. After years of trading I now know my strategy was only about 10% and the way I think and react affected most of my trades. I’ve gotten much better where I just set and forget with an occasional price signals at my TP1, TP2, SL1, SL2. I’m similar where I don’t use a rigid SL but I do have price signals to let me know once I’m in that region.
New traders if you’re out there trust me if you have a strategy and it’s been tested where it’s winning the majority of trades proceed in the same manner. Either have rigid SL/TP already incorporated in the trade or price signals that alert you when it touches that zone. The amount of trades I closed prematurely off of fear of price reversal are truly asinine. With practice we learn as they say.
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I suspect many new traders do indeed use a fixed amount SL. And if they’re going to consider a secondary choice of SL position it will be tighter, not looser.
I suspect the reverse is true of experienced traders - they’re thinking how wide they can put their SL, and if there’s a second choice position it will be wider still. UNTIL the trade is opened - from there on a SL should not be widened.
Pressure on traders to get the SL position correct to the pip is highly indicative that they’re not getting into trends, they’re more likely trading reversals and there is one chance and one chance only to get entry, SL and TP right.
All my long-term trade are trend-following. I always set a SL and I want it wide. But I often do not wait for it to be hit - the deteriorating TA will be sufficient reason to exit as this same tendency will also offer me a chance to re-enter, so nothing lost. I never set a TP but look to exit after any unusually vigorous with-trend price move - its almost inevitable that an unusually vigorous price move is followed by a reaction, and in a trend that’s just another opportunity to get in. Occasionally, the exit is even at a top, which is never intentional but always satisfying.
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I feel many day traders maybe seeking a profitable day or week, therefore maybe hoping to be successful trading on the lower time frame s.
thanks for the feedback , I would cut my trades and 90% of them went on to take profit that really stung me internally. After years of trading I now know my strategy was only about 10% and the way I think and react affected most of my trades. I do apologize i do not understand the second sentence .
cheers
maybe this is something which comes with experience, as oppose to learning from text book the dynamics of the pairs .Many a novice may become impatient with such wide stops
The second part kind of references what Tommor was saying.
I don’t have a RIGID/HARD SL or TP. Because I don’t like closing my winners early and don’t like to let my losers run long as well. What I do is set up a 2-3 TP potential areas and 2-3 SL potential areas. If the trade passes lets say my 1st zone and is about to hit the 2nd zone I now move the SL to the TP at the 1st zone. When it comes to SL areas the first 2 are showing me my trade deteriorating/potential zones to increase positions as well (have to weigh risk during times like that) but my final one is my actual SL and once it hits I close the trade out.
I’m not a fan of using the TP just because your trade can usually run further and it might just retrace back a small bit before continuing. I rather exhaust the trade to the fullest and lock in my gains then.
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ok thanks, ive never really had the problem of cutting my trades early and then seeing them turn into good profitable trades. i do view support and resistance levels on different time frames. My downfalls have been letting certain trades run, its the same adage they do tend to go back to the original levels after closing them eventually.
i guess the number 1 priority for a beginner is to protect the account from blowing up.So some sort of SL would be benificial to an extent. Rather than having a method around support and resistance and maybe the use of ATR, if the above heading is true why not just execute the trade earlier at a fixed amount. obviously it depends on the traders style,experience ,skill,expectations ect
this is from a guy who not been trading that long to you and tommor,are the big institutes just manipulating everything, especially the majors and the major indices i suppose in asking that question im exposing my naivety .Observing the charts it just seems one big mind game, it helps to sit back at the back of the queue and just observe though.
if you spreading on IG, are you using the spot or future price
IG is just my demo account, I am spreadbetting on LCG, using spot prices always.
cool ,yes they do seem wide
In my opinion, a trader’s success is determined by the fact that he or she is always in search and never stops at what has been achieved, and this is extremely important because you cannot learn one strategy and use it all your life - it will not work.
Abit like alot of great artists then who was forever experimenting with new ideas
A successful trader should be well acquainted with many issues and constantly interested in many things and details.
And what you have described is only one of many nuances to keep in mind. But it’s good to be told about it, because it is really important.
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It depends on the experience. The better the experience, the better the profit can be gained from the market. Many traders trade without stop loss because their money management is much better. If you can trade with good money management, there is no problem even if you don’t give stop loss.
I don’t know to be honest.
This is like one of those captain hindsight moments, easier said than done. Of-course you wanna cut your loosers, and let your winners run, But if that’s the case, then why use a SL, and if so, where are you gonna do the cutting of that looser, and if you are cutting it there, why not just put a SL there? Do you see where I am going with this?
In theory it sounds good, but in practice not really. The SL is there so the loosers will be cut when we say, so that part is figured out, and letting the winners run is actually called and open target policy, which sometimes works against you (if a heavy retracement happens and you don’t have a TP such as I do).
So, I kinda don’t agree that successful traders do these philosophical things.
Good traders have their own set of rules, but predetermined risk is what they all have in common if you ask me
If you know how to correctly place a trailing stop loss you can ride winners all the way, and get out as they turn.
Stop losses should not be fixed at the same level you entered at.
It seems a no brainier to ride winners as long as you can - rather than prematurely exiting at a target price
Some times the target price exit and the trailing stop exit work out about the same, but with the trailing stop exit there is always the chance of remaining in should price carry on in your direction
I get what you are saying.
Look, in my opinion, any decent trader uses a trailing SL to a degree, because it’s nonsensical otherwise.
Personally, I have 2 trailing targets, either half of my original SL, or BE, after BE there is no point to do anything. A pro trader knows the full potential of the trade, knows, the infliction points, and how to manage that.
Letting the winners run is a pie in the sky concept, a retracement will eventually happen and hit that, why not just exit at the highest point possible and wait for the retracement to finish before entering again?
The only way price will continue is, if it’s a trending scenario.
I think the way I’ve always looked at it is I always give back some of my profit - the art is on finding where the move no longer works
As for price only continuing in a trending move - that’s true, but trends happen on all timeframes even a scalper is catching a trend are they not?
And if they aren’t - then maybe they should be considering it?
I ramp up my trailing stops quite quickly - so have never had an issue with this price target over letting profits run thing
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