1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

stop loss size and market noise?

Discussion in 'Beginners Bootcamp' started by borisofoz, Nov 4, 2010.

  1. borisofoz

    borisofoz Private

    Joined:
    Oct 25, 2010
    Messages:
    21
    Likes Received:
    0
    Hi all

    I'm new and have a few questions if you have the time.

    I've opened a practice account and I'm using signals.


    They are swing trading signals and you enter a trade with a stop loss of generally 50 to 100 pips.

    What I'm having trouble with is that the signals are shooting for 100 pip plus profit movements. .....and most signals have ended at a loss or break even if lucky. However why I am posting is that for at least half of these trades... I have watched the pip profit go up to say 50 pips at least. Just to watch it go back to break even and the deal is closed.

    so during this 50 pip profit mark I get a signal to update my stop loss to say entry price. 50 pips behind the current price.

    so at this point in time we could close for 50 but we need to keep this 50 pip margin for market noise? price action? are these correct terms?

    its tempting to close, but I'm following the signals=discipline.
    just asking what size stop loss do others use?

    I guess its necessary to keep it at some size to allow the price to oscillate up and down, and hopefully this will give it enough room too move in the average direction we need for profit without hitting the stop loss?

    how many pips stop loss do you use?

    any help, advice, correction or explanation will be much appreciated.

    Cheers



    Boris

    :(
     
  2. JohnSkr

    JohnSkr Private

    Joined:
    Oct 29, 2010
    Messages:
    21
    Likes Received:
    0
    I think there couldn't be the fixed answer... because the stop loss size depends on many factors, such like what strategy do you use, what market conditions are there at the moment and many other factors.
     
  3. Pharaoh

    Pharaoh Colonel

    Joined:
    Oct 3, 2007
    Messages:
    19,621
    Likes Received:
    2,181
    I fully agree with JohnSkr. SL needed will vary with a pile of factors. If you trade a system with a fixed SL, that SL needs to be very carefully tailored to the pair and the system needs to be set up to only trade under the market conditions it was designed for.

    One option to consider. If trades often fall back to entry after going up 50 pips, look and see if you would come out ahead in the long run by closing 1/2 of the position at 50 pips and setting your SL to break even. This cuts your potential profit in half, but also secures 1/2 of the potential profit for trades where the price does reverse back to entry.
     
  4. borisofoz

    borisofoz Private

    Joined:
    Oct 25, 2010
    Messages:
    21
    Likes Received:
    0
    Thanks for the reply

    o.k that makes sense, that there's different conditions etc.

    will have a think about it.

    cheers
     
  5. borisofoz

    borisofoz Private

    Joined:
    Oct 25, 2010
    Messages:
    21
    Likes Received:
    0
    with that option, instead of one order I purchase two orders of equal quantity and close one say at 50 or whatever it seems to have peaked at....I will trial them both for a bit. cheers
     

Share This Page