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stop/loss take/profit strategy
- Thread starter $$$lover
- Start date
1:3
r/r
r/r
give yrself 50 * 2% max loss per trade bullets, or even 100 * 1% max loss bullets if you believe you tend to 'overtrade'. initially, shoot for 1:1.2 r/r only. IF you manage to grow your trading equity consistently, lets say you've made +20% on your initial equity - doesn't matter if your perf was initially negative... all the contrary actually... - then start increasing your trading & max loss size by say 10-20% everytime you grow your equity by 20% (but promptly decrease if going the other way!), and scale out 80/20% your exits where you have reasons to believe there is potentially more to be made... IF this works out, am sure you'll find out about how to 'optimize' further by yourself ;-) good luck
lets say you are not sure you have a real edge but are tired of paper trading and want to put real money at play on a highly liquid pair, say, eurusd (the initial post refers to intraday fx), where the spread is around 1pip on many platforms, retail or wholesale.
open whatever type of account is suitable (mini or standard), and fund it with money you can afford to lose but dont really want to, then initially go for say 25 SL-30 TP very strictly, ie no averaging down or other excuse to overtrade or not take the loss if the mkt goes against you. i wld also recommend to strictly time-box your trade depending on whatever timeframe you have chosen, be it 15 minutes, 1h, 4h or less, and exit the trade no matter what if you haven't hit your SL/TP targets.
the objective at this stage is not to make money, its to acquire some precious discipline wrt to stop losses... and some confidence in the strategy, whatever it is... say your right 50% of the time, your acct is going to grow, v.slowly thats for sure, but reasonably steadily...
once you trust yourself enough to take losses when the mkt tells you to, and trust that your strategy's hit rate is indeed above 50%, then move on to the next step, where you will exit 80% of your position when you hit your TP, let the other 20% run its course. ideally you shld also start moving your stop loss back to break-even once you are less than 50% away from your TP etc etc. the objective here is to start clocking in good money and acquire some confidence in identifying reliable circumstances for a higher TP2 target...
once you get this to work well enough, there are plenty other threads you can look into for more elaborate entry/exit strategies ;-) cheers
open whatever type of account is suitable (mini or standard), and fund it with money you can afford to lose but dont really want to, then initially go for say 25 SL-30 TP very strictly, ie no averaging down or other excuse to overtrade or not take the loss if the mkt goes against you. i wld also recommend to strictly time-box your trade depending on whatever timeframe you have chosen, be it 15 minutes, 1h, 4h or less, and exit the trade no matter what if you haven't hit your SL/TP targets.
the objective at this stage is not to make money, its to acquire some precious discipline wrt to stop losses... and some confidence in the strategy, whatever it is... say your right 50% of the time, your acct is going to grow, v.slowly thats for sure, but reasonably steadily...
once you trust yourself enough to take losses when the mkt tells you to, and trust that your strategy's hit rate is indeed above 50%, then move on to the next step, where you will exit 80% of your position when you hit your TP, let the other 20% run its course. ideally you shld also start moving your stop loss back to break-even once you are less than 50% away from your TP etc etc. the objective here is to start clocking in good money and acquire some confidence in identifying reliable circumstances for a higher TP2 target...
once you get this to work well enough, there are plenty other threads you can look into for more elaborate entry/exit strategies ;-) cheers
2cents:
Thanks for the many helpful pointers and examples, especially the practical discipline-related ideas (like the time-box suggestion).
As a matter of curiosity, do you specialize in day or swing trading, or do you find longer term macro trades (eg, a current Kiwi short or NZD and AUD carry trades back in late 2000) more profitable in your experience? Do you think that, for the latter, fund security is particularly important (since one won't be withdrawing profits regularly) and therefore a platform like UBS FX Trader may be preferable to FCM MMs, retail ECNs or second-tier PBs?
Incidentally, would you or your friends happen to have any first-hand experience of the UBS FX Trader platform? I wonder if it's a good alternative for private traders.
Thanks!
Thanks for the many helpful pointers and examples, especially the practical discipline-related ideas (like the time-box suggestion).
As a matter of curiosity, do you specialize in day or swing trading, or do you find longer term macro trades (eg, a current Kiwi short or NZD and AUD carry trades back in late 2000) more profitable in your experience? Do you think that, for the latter, fund security is particularly important (since one won't be withdrawing profits regularly) and therefore a platform like UBS FX Trader may be preferable to FCM MMs, retail ECNs or second-tier PBs?
Incidentally, would you or your friends happen to have any first-hand experience of the UBS FX Trader platform? I wonder if it's a good alternative for private traders.
Thanks!
mostly day trading here but thats mostly because i haven't found an edge on longer timeframes yet, also because i am not patient enough yet, but i am getting there, slowly but surely, on v.small size for now, will increase as it gets better...
re fund security, of course i would always go with say UBS all other conditions being equal! fund security and being able to sleep well is priceless... (sorry gotta run, dinner stuff...)
re fund security, of course i would always go with say UBS all other conditions being equal! fund security and being able to sleep well is priceless... (sorry gotta run, dinner stuff...)