Fixed pips is the easiest answer I guess !
Depends on what the strategy demands. It differs from bot to bot.
I will set profit at my nest resistance level from my markups.
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i set it at overbuy/sell level of higher time frame ,the point is ,i tp at relatively higher price ,im happy
Iāve stuck to setting TP to 20 pips. If the market it moving slowly and Iāve made say a 10 pip gain I might just close at that point. I might never hit the high high but Iām happy with a greater number of small returns. All IMHO.
The problem I find with fixed pips is that I risk different amount of pips per trade depending on my analysis. I donāt think it efficient to say 20 pip take profit when I could be risking 5,7,9,10 pips.
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iāve certainly known consistently profitable, successful traders who use this approach or something almost the same, and i think it has much to commend it (being basically price-action-determined)
and by the way, welcome to the forum!
i agree completely
out of everything iāve ever experimented with, over the decades, āfixed pipsā approaches have always been the very worst-performing for me
What do you think should be the right R:R for beginners if not 1:2. I seen some professionals claiming to be satisfied with 1:1.5 R:R trading in the lower time frames.
hereās the question, from the beginnerās perspective, with a 1:2 R:R:-
what will be the overall effect when they have a series of 30 consecutive trades, over an only slightly bad run, comprising 26 losers and 4 winners?
will they assume that their method isnāt working, for some reason they wonāt understand, and that they should stop using it and try something different, or will they assume it works as planned and that theyāre having an only slightly unlucky run with it?
they wonāt know, will they?
they lack the experience and math/stats understanding to distinguish between the two
this is a problem one must avoid
and it will happen to them, quickly or slowly, sooner or later
thatās why i would recommend avoiding that problem by starting with an R:R closer to 1:1
even that will give them 8-10 consecutive losers at some point, or a series of 20 consecutive trades with 4 winners and 16 losers, even when itās working perfectly well
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I would use the ATR or the ADR for the instrument that you are trading for the time frame and decide if you are seeking 50%, 75% or whatever percentage of that instrument.
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I like the standardisation that ATR brings. Its ridiculous to hear traders saying they always use, say, 50 pips to measure to their stop or TP.
As an example, 50 pips is a way bigger move on AUD/USD than it is on EUR/USD.
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Yup this is also what I do!