I’ve got a couple questions i would like to ask the community here on babypips. Firstly what was your risk/reward when you first started, was it 1 on 1? Does anybody here trade support and resistance lines and if yes how good are they to use for taking a trade? Also where do you set your exit points when you have taken a trade? Do you exit as soon as you hit you your profit target or let the trade ride out for a little longer but reduce your position size after hitting your profit target? Lastly i know everyone says you should cut losses but how quickly do you cut them and is there a strategy that people use when cutting there losses?
Sorry for all the questions but i just need some help if possible.
Same as it is now, I never risked more than 5% of my entire balance per trade. In terms of winning, I always trail my sl to guarantee profit once it goes positive.
How has this been working for you? I’d like to try it out but I feel I’ll get chopped out if I keep moving SLs. How long do you typically keep your trades open?
While most folks just calculate risk based on the stop loss after planning a trade, then is set accordingly. However that is not the end of the story. That risk needs to be matched up with your personal risk tolerance and the account equity to calculate the proper position sizing.
I have used this on a daytrading kinda setup where if the trade didn’t hit my target I would’ve closed it anyways. So, by using a trailing stop it at least ensures that there are no losses and when there are wins there are really good wins. If your entry is good it can create a really high win percent, you’ll get stopped out more often but you’ll get some good trades too.
Yeah that’s the thing, you gotta be confident with your entry. I’m usually tentative and too afraid (or greedy lol) I’ll get chopped out to trail my stops. I agree it’s a good process to have though. Perhaps with more experience this is something I can do more often.
I think it’s a good idea to use trailing stop to lock in profits although i need to do more research to get a better understanding of it. Does anyone here use a fixed stop loss like for example 20 pips and if the trade hits the stop then you exit? Am still a bit uncertain about when to exit a losing trade, should i only exit when it hit my stop loss or sooner?
I place my stops pretty wide, trading on the daily charts. If a candle closes on the wrong side of an S&R level or a trend line, I exit the trade early though. I still figure my risk to reward based on where I place my stops. Since I’ve started this habit, I have logged more losses but my losses are a lot less than my profits. I went from a success rate of around 60% down to around 40%. After reviewing my log from January in which I only had a gain of 34 pips, if I had let my stop losses get hit I would be well in the red.
It all depends on the strategy. For short-term intraday trades the risk-reward should be at least 1/2 or 1/3. At the same time, for the swing trades, the risk-reward should be higher (like 1/5 or even 1/10). The best r-r ratio reached was 1/13 for swing trade, but such results are quite rare.
I dont have trades open for set periods of time, can be a couple hours to a few days. It will either hit my SL or TP. I always trail behind by 5 or so pips once it hits a desired profit, that way at lease some is locked in, and I am still happy if it drops down.