Try manual backtesting this idea as follows:
Choose a pair and go back on your daily chart for a year. Look at all trade signals and make a record of how much the price retraced from the open before it progressed in the direction of the trade. You can then decide "on average" just how much you want the price to retrace before you enter a second order. And you could use this data to calculate an appropriate S/L for that pair. I've done some of this with very interesting results.
Choose a pair and go back on your daily chart for a year. Look at all trade signals and make a record of how much the price retraced from the open before it progressed in the direction of the trade. You can then decide "on average" just how much you want the price to retrace before you enter a second order. And you could use this data to calculate an appropriate S/L for that pair. I've done some of this with very interesting results.
Quoting GridTraderDislikedNear the beginning of this thread it was mentioned about using 2 lots. I have not heard anymore response regarding this. Here is what I'm thinking...
Very often I've read that the trade will go negative for a while before going into profit...stuff like we must be patient and so on.
So what I am suggesting is to cut our lot size in half and divide it into two trades. Let's say the signal is to go long and on the next candle we place our buy at the open let's just say it's 1.2000. So the first half of our order goes there and the second half further down let's say 25 pips at 1.1975.
Now we keep our S/L for both at the same price. So if S/L is say 100 pips our stop being hit would be a loss of 80% or so instead of the full 100% (since 2nd half of order is 25 pips below entry). If the signal turned out to be good and our orders go positive... by doing this we have gained some "extra pips". The only time I see this not being useful is when the candle's open is equal to it's high/low which from my observations does happen but seems to be pretty rare. Any thoughts?
GTIgnored