Forex Stops

R

Rashid_G.

How precise do I have to be for a 25 pip stop to survive,.. pick the EXACT top?????? My idea is fine-tuning for Daily Swing trades...

Most of my losses on Forex tend to look like this picture... Trading IN FAVOR of an upper trend (Like ES last 5 years) close stops end up being a waste. Thinking of doubling my stops but NOT reducing my size with the idea the stop outs will be much less often BUT for larger losses...

It is beyond irritating..... Thoughts anyone?
 

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Think of it this way. If you have an avg 2 pip comish+spread+slip....... on a 25 pip stop you need to make 8% a year just to break even. The wider your stop the less house vig has an impact on your bottom line. If you have 2 pips of costs per trade and use a 50 pip stop then you have to make 4% a year to break even. 100 pip stop , you need to make 2% to break even ect.

If you are taking a trade that has a 1:1 risk reward expectancy whether it is risk 25 pips to make 25 pips or risk 50 pips to make 50 pips your odds of winning are still 50-50 minus commission , spread, slip.
 
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But with the 50 stop to 50 profit the stops will be rarer.. assuming proper trade location IN TREND..

Just need to replace the thinking of a stop as "loss prevention" (Fear??) with a stop as a trade invalidation.. On that GBP/CHF trade IF it CLOSED up there then trade invalidated.. but it didn't so either I set alarms for the closer stop, THEN monitor.. or invent a "stop on bar close only" feature.... (there is a reason no broker has such a stop)...
 
Rashid_G. said:
But with the 50 stop to 50 profit the stops will be rarer.. assuming proper trade location IN TREND..

Just need to replace the thinking of a stop as "loss prevention" (Fear??) with a stop as a trade invalidation.. On that GBP/CHF trade IF it CLOSED up there then trade invalidated.. but it didn't so either I set alarms for the closer stop, THEN monitor.. or invent a "stop on bar close only" feature.... (there is a reason no broker has such a stop)...
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yes, I trade with ib and the charts are not accurate. Sometimes it trades way through (on the chart) and I never get stopped out, but the screen shot is accurate.

I routinely use 25 pip stops to enter

the goal of a stop loss is to become irrelevant. It is so far away that the last thing you are thinking about is it getting hit.
 
Factoring the Spread in as Z1Trader mentioned I am heading for a 40 to 50 pip stop.. located properly at a rubber-band end so 1:1 RR is achievable.
 
Rashid_G. said:
Factoring the Spread in as Z1Trader mentioned I am heading for a 40 to 50 pip stop.. located properly at a rubber-band end so 1:1 RR is achievable.
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yeah, I use a 50 pip stop loss. never move it. sometimes it's a real bitch. On a busy day that's all I do is get stopped out. But once it is all settled down I can go weeks without getting stopped out. That's where all the money is made.
 
Rashid_G. said:
How precise do I have to be for a 25 pip stop to survive,.. pick the EXACT top?????? My idea is fine-tuning for Daily Swing trades...

Most of my losses on Forex tend to look like this picture... Trading IN FAVOR of an upper trend (Like ES last 5 years) close stops end up being a waste. Thinking of doubling my stops but NOT reducing my size with the idea the stop outs will be much less often BUT for larger losses...

It is beyond irritating..... Thoughts anyone?
More...

The sharper (nearer to the top) your entry the tighter your stop, you will find your stop outs increase but also risk reward increases hugely, it pays to have a solid methodology and a good handle on price action to know asap if your entries good or bad
 
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WWarrior said:
The sharper (nearer to the top) your entry the tighter your stop, you will find your stop outs increase but also risk reward increases hugely, it pays to have a solid methodology and a good handle on price action to know asap if your entries good or bad
More...

I am more of a swing trader as I cannot monitor trades a lot. Also I am Eastern US so a lot of key moves in currencies happen as I sleep. Would have been great to re-enter the trade but I would have to be up at 3 am...
 
Rashid_G. said:
But with the 50 stop to 50 profit the stops will be rarer.. assuming proper trade location IN TREND..

Just need to replace the thinking of a stop as "loss prevention" (Fear??) with a stop as a trade invalidation..
More...

Having an 'expectation' of price every time you go into a trade will help you achieve this
 
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