hello everyone, I’m having difficulty choosing which pattern to use as regards locking profits…
I noticed that most of the time when the market hits my tp it still goes in that same direction…
but I fear using trailing stop because I may not get a specific r:r ratio…
what do you suggest?
Don’t use a trailing SL. Use a fixed SL but move it higher manually if necessary. Don’t use a TP. Try closing part of your position and advancing the SL when it reaches 1:1.
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Keep an eye on market structure, if the momentum slows down, theres a chance it may come back and hit you at BE or pullback. May as well TP and look for another entry.
I’ve found generally I have better rewards per risk with stops that I trailed. Traders set profit targets far too close, like 2:1 and the like.
But use a trailing stop and you will often get this anyway (if its a winning trade) with the added bonus of a potentially larger amount.
You’re fear of not getting your risk-reward is irrational - but completely natural for a beginner.
There are other pitfalls with profit targets. You might jump in again once your target has been reached if you see the market remains strong.
Or you might start fighting with the market if you expect a certain amount of money on a given trade and it doesn’t pan out.
From my own experience, it’s better to never expect anything from a trade once it’s been triggered. This is the very opposite of a profit target.
But heh I am completely biased.
I use a mental TP when I break recent highs or lows (depending on trade direction) and that point I scale out a large portion of my position and manually raise my SL to BE. You will have nailed down your bread and butter but you’d surprised how much extra you can often make this way without further risk.
Great, really fixed stop loss should be used. And 1: 2 risk ratio should be kept right.
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Hi,
Both trailing SL and fixed TP target work. And both of them have their advantages and disadvantages as everything in trading.
With a trailing SL you would have to look more at the charts to move your SL more into profit, as with a fixed TP you can just let it run to your target without having to look at it too much. See what works for you and repeat the process.
Remember that trading is all about having a proper trading system and profit system with rules that you follow blindly. Just make your wins bigger than your losses so your win rate doesn’t have to be high to be profitable.
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I don’t think using a trailing stop would affect your risk-reward ratio. Try to play around with it manually instead of going automated. You can customize the settings. Mind telling what platform you use?
I prefer trailing loss than stop loss because it doesn’t limit profits. It ensures that the trade is moving in the direction you want but if you find it complicated then you can start with stop loss and later on you can try using trailing stop
shift your SL to sart when the trade goes beyond two resistance
It’s always good to have a profit target in mind however let your winners run. There’s nothing wrong with the trailing stoploss when there is great momentum behind you