There is a strategy I found online that I have been experimenting with. I realized that on average, it gives me between 15 to 20 pips on average for several trades I am taking. It is based on bollinger bands and on the H4 timeframe. I want someone to advise me on setting the TP. I found that I have been setting the TP on an RR of 1:1 but the TP never gets hit and I don’t have all the time to be looking at my mobile phone. So, I want to ask. Would it be wise for me to set all trades to a TP of 15 pips no matter the RR for the trade? Thanks.
You mentioned that you are not able to monitor your trades regularly. So why dont you make use of a trail stop at say 15 or 20 pips?
That’s the first thing I did but the trailing stops were giving me like 2-5 pips profit when set at 10 pips. So I decided using a 10 pips TP won’t be a bad idea. It’s better than 2-5 pips. What do you say?
Add a little spice to the strategy and call it your own
You get stopped out?
No it won’t
I set a trailing stop to each trade and the stop gets hit at 2-5 pips each time. That means I would have gotten a better deal if I had closed earlier and that is why I want to be closing each trade by setting a tight TP. At least I am guaranteed of like 95% win rate with a tight TP
Can you explain why it is not wise? As I said before notwithstanding the RR, a tight TP increases my win rate and I can make up for it by increasing my risk tolerance. I am sure that with a tight TP I have a 95% winning rate from my calculations
Hello,
This is the way I see it…
If you set a hard TP of 15 pips on all trades, that decision appears to be more of an arbitrary decision as opposed to one based on any actual analysis. Thats strike 1.
Also, if you set a 15 pip T/P regardless of S/L, your opening the door to trades with negative r:r ratios. This will have a correlating negative impact on your overall expectancy. Thats strike 2.
Maybe your TP isnt the problem? There might be a way to maximize your entries and tighten your S/L w/o having to take negative r:r positions if you take the time to analyze your current strategy and optimize all aspects of it.
Best of luck to you.
Strike 1 above: I analyzed my trades using the strategy and I discovered that most trades run up to 20-25 pips and that is why my trailing stop was giving me 5 pips profit.
Strike 2: what do you mean by negative r:r ratio? Most of my SL are 17-25 pips based on the strategy and with a 15 pips fixed TP I don’t think that is going into negative RR. Can you elaborate?
I don’t want lots of pips. I just want something that gives me consistent winning rate and I think a 10-15 pips fixed TP does so.
What is there?
It is dangerous to have a fixed TP. It could be acceptable if you fix your SL base on your risk capital but that should not necessarily be applied to TP.
You need to go back to your system and do some work. Find a way to make trailing stop work for your system. This is a trade war between your losers and your winners, how sure are you that your winners will beat your losers after 6-12months in terms of statistics?
That’s the reason leaving your winners to run is very vital for profitability in the long run. Assuming your 15pips TP is hit, work on your system in such a way it will be able to lock some profit or break even why you keep your trade on.
When it move from 15pips to 30pips you can then lock 10-15pips and let your trade keep going. Work on your trade to achieve this, it is possible. There is a way you will balance your system to accommodate trailing stop, you will get stopped out at a loss, break even or small profit but it will be 1 in every 10 trades. If you are finding it difficult to achieve this, you can share your trading system and members will put heads together to help you out.
There is nothing like a consistent winning rate unless you are relating it to winners Versus losers. If not, you can’t win all the time, it is a statistical war between your losers and your winners.
Thanks. I will like to share the trading system. It is online. But I will not be at home until 6 hours time. When I get home I will post the link here so others can test it out and tell me what they think about it and how to improve it so my trailing stop will be better. Thanks for the encouragement.
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You can lose money with a 99% win rate.
I am pretty sure you will not achieve not even close to 95% with a 25 pip stop.
Trailing stops are meant to be used in long term trades, its not advisible to use it on short term trading
This is the link to the strategy.
It is a good strategy but my problem is that the trailing stops gives me very low pips. Can someone look at it and tell me how to optimize it? I trade on the H4 timeframe because it suits my lifestyle. Thanks. My trailing stop is 10 pips
From what I read, it is a simple system of observing trend, then waiting for a retracement above the Bollinger centerline and below the 50EMA (downtrend) or waiting for retracement below the Bollinger centerline and above the 50EMA (uptrend).
Let’s look at the H4 USDJPY chart above, you observe it’s an uptrend. Price retraced to 111.641. At the point of retracement, you will notice price went below (crossed) the Bollinger centerline But didn’t get to/cross the 50EMA meaning price stayed above the 50EMA, enter after price has closed with a bullish candlestick that cross back to the Bollinger centerline going upward and place SL around the purple circle with a small dot inside (see image) then TP when price gets to the Bollinger topline. Trail your stop to break even after two candlestick movement in your favoured direction. I can see you will have a good RR if you apply this.
The image below is another example for downtrend
Did a quick backtest with four currency pairs and it is not doing bad at all
I think it’s a nice strategy. Thanks for your insight. Will surely start working on your suggestions
For me this is another version of the hardest question in trading - when do I close a winning trade?
Difficult to answer on short time-frames especially, and particularly when you can’t watch these things continuously.
To expose your trade to possible extraordinary gains, why not set your TP at +15, but then put in another entry order at +15 or maybe +20: same size, same SL distance and same TP distance. Also put in a third entry order at +30 or +40. And so on.