I created a simple formula to set TP/SL

T

Traderwithnoname

As the title says, I created this simple formula to set the TP (Target Profit) And SL (Stoploss) using the very little common sense I had.

I'm open to the suggestions and would appreciate them.

Here's the formula or framework you say,

Use the 50% of the 1% of the price of the security.

This may sound stupid but it seems like working great for me, Here's an example if you didn't get it.

Let's say a Stock is trading at $100, then the 1% of that stock will be $1, and now the 50% of this $1 will be 50 cents, and yes the 50 cents will be your TP and SL

Now this works great for 1:1 RR but you can test this with different RR accordingly.

I know some traders use price levels for their TP and SL but as it is the past price movement, it might not work in future (good luck with that) I've noticed that consistent profits are the key, even tho you can't achieve 1:50 RR with this one but I'm sure your win rate will drastically increase

I'd love to your thoughts on this one and take it easy.

End.
 
Traderwithnoname said:
As the title says, I created this simple formula to set the TP (Target Profit) And SL (Stoploss) using the very little common sense I had.

I'm open to the suggestions and would appreciate them.

Here's the formula or framework you say,

Use the 50% of the 1% of the price of the security.

This may sound stupid but it seems like working great for me, Here's an example if you didn't get it.

Let's say a Stock is trading at $100, then the 1% of that stock will be $1, and now the 50% of this $1 will be 50 cents, and yes the 50 cents will be your TP and SL

Now this works great for 1:1 RR but you can test this with different RR accordingly.

I know some traders use price levels for their TP and SL but as it is the past price movement, it might not work in future (good luck with that) I've noticed that consistent profits are the key, even tho you can't achieve 1:50 RR with this one but I'm sure your win rate will drastically increase

I'd love to your thoughts on this one and take it easy.

End.
More...

It's still a 50/50 coin toss, and you'll get stopped out more than you'll get your target filled, because if what you said worked and was profitable, everyone would be doing it.

Entry definition matters just as much as exit, so the % deal would need to be adjusted based on historical PA.
 
Traderwithnoname said:
As the title says, I created this simple formula to set the TP (Target Profit) And SL (Stoploss) using the very little common sense I had.

I'm open to the suggestions and would appreciate them.

Here's the formula or framework you say,

Use the 50% of the 1% of the price of the security.

This may sound stupid but it seems like working great for me, Here's an example if you didn't get it.

Let's say a Stock is trading at $100, then the 1% of that stock will be $1, and now the 50% of this $1 will be 50 cents, and yes the 50 cents will be your TP and SL

Now this works great for 1:1 RR but you can test this with different RR accordingly.

I know some traders use price levels for their TP and SL but as it is the past price movement, it might not work in future (good luck with that) I've noticed that consistent profits are the key, even tho you can't achieve 1:50 RR with this one but I'm sure your win rate will drastically increase

I'd love to your thoughts on this one and take it easy.

End.
More...

You could just say use .5% of the price as sl/tp o_O

The more important question is why .5%?How about .4%? or 0.1%?
 
hilmy83 said:
You could just say use .5% of the price as sl/tp o_O

The more important question is why .5%?How about .4%? or 0.1%?
More...

As the price fluctuates every second it wouldn't be possible to set the tp/sl of 0.1, 2, or 3 % but I guess you can do that with algo.
 
Y
Overnight said:
It's still a 50/50 coin toss, and you'll get stopped out more than you'll get your target filled, because if what you said worked and was profitable, everyone would be doing it.

Entry definition matters just as much as exit, so the % deal would need to be adjusted based on historical PA.
More...

Yep but you are sure to win or lose, setting unrealistic or far away TP/SL would lower win rate or even add up, depending on strategy and other factors.
 
A really stupid idea. Why? Because nowhere do you link your tp/SL to the volatility of the returns of the underlying security over the investment horizon. What if said security changes by 0.5% every few minutes. Then you expect to exit every few minutes? Also, setting a SL and tp equidistant from current price effectively is alike tossing a coin.

A much more important question to me is why I wasted my precious time responding to such garbage.

Traderwithnoname said:
As the title says, I created this simple formula to set the TP (Target Profit) And SL (Stoploss) using the very little common sense I had.

I'm open to the suggestions and would appreciate them.

Here's the formula or framework you say,

Use the 50% of the 1% of the price of the security.

This may sound stupid but it seems like working great for me, Here's an example if you didn't get it.

Let's say a Stock is trading at $100, then the 1% of that stock will be $1, and now the 50% of this $1 will be 50 cents, and yes the 50 cents will be your TP and SL

Now this works great for 1:1 RR but you can test this with different RR accordingly.

I know some traders use price levels for their TP and SL but as it is the past price movement, it might not work in future (good luck with that) I've noticed that consistent profits are the key, even tho you can't achieve 1:50 RR with this one but I'm sure your win rate will drastically increase

I'd love to your thoughts on this one and take it easy.

End.
More...
 
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