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larger s/l needed for trading day/week charts?

  • #1
  • First Post: Nov 27, 2009 5:20am Nov 27, 2009 5:20am
Hi,

As a newbie in forex trading I try to stick to the 1day and 1 week charts for trading, as advised elsewhere on these boards. What I have found so far is that I quite often get the trend right but my s/l get hit by the short term noise.

Any thoughts on how many pips your stops should be for swing trading using the day/week charts?

Thanks for any advice or thoughts you may offer.
  • #2
  • Nov 27, 2009 5:42am Nov 27, 2009 5:42am
A stop should never be a fixed number. Look for good Support or Reistance to place your stop behind it. This way you'll make it harder for price to take out your stop. And if it does it actually means something.
  • #3
  • Nov 27, 2009 6:05am Nov 27, 2009 6:05am
If you plan to trade the Daily/Weekly charts you must base your stop on the S/R levels as you see them on those charts.

At this stage you should be concentrating on what it takes to end up with more profitable trades than losers. There's all the time in the world to worry about making profits. I know the old arguments will come up that you can have more losers than winners and still be profitable but that's not the point of this post.

Once you have found a way of trading where you have more winners in the + column than losers in the - column you can start to refine your entry and exits based on your historical data.

For now I suggest you demo with a b roker that lets you trade nano lots (0.001), enter every trade with a single lot, set your stops a safe distance from the next significant S/R level and let the trade play out. This does mean forgetting Money Management for now. With nano lots you might find a 250 pip stop would let you trade 5-6 lots; forget that and just stick a single lot on the trade. Later on, as you gain confidence in what works for you, start working with the basic 1% and stay with this for a couple of months. During this time you'll also find ways to trade the longer charts but refining your view on shorter TFs (say 4-hr charts) to improve your entries.

Over time you will get to see when you should get out before your stop gets hit and when you should let it ride until the tide turns in your favour. I'm assuming you intend to 'trade the trend', another bit of advice you'll see all over this and other forums.

This is all I do now with my live account and I've learned to sit back and ignore intraday noise. It takes a little while to learn this way of trading but once mastered you lose the fear element you get with every pullback.
  • #4
  • Nov 27, 2009 7:00am Nov 27, 2009 7:00am
Thanks Peter and Tj,

I actually took a lot of advice from your beginners guide Peter, many thanks for that. I actually tried to use MM so I ended up using fairly tight s/l, even with 0.01 lots on my 2k demo account.

I am trying to trade with the trend that I find on the day/week charts. At the moment I'm focussing on the EUR/JPY because the support/resistance is easy to spot at the moment. Obviously realising that those won't last forever.
  • #5
  • Nov 27, 2009 7:20am Nov 27, 2009 7:20am
Quoting MorningMania
Thanks Peter and Tj,

I actually took a lot of advice from your beginners guide Peter, many thanks for that. I actually tried to use MM so I ended up using fairly tight s/l, even with 0.01 lots on my 2k demo account.

I am trying to trade with the trend that I find on the day/week charts. At the moment I'm focussing on the EUR/JPY because the support/resistance is easy to spot at the moment. Obviously realising that those won't last forever.
Try moving to a demo with nano lots (400:1 leverage). You'll be surprised how you can build an account using pennies if you get long runs from a Support or Resistance area. It'll also teach you how to manage a long-term trade; ie how to stay in using S/R to edge up/down your stops over days.

As I say, it's not about making lots of money at this stage, it's all about finding how to spot the best opportunities and exploiting them for the maximum gain. Less is more to my way of thinking; once you have the longer TFs sorted then you'll know how to create an edge using the 4- and 1-hr charts.
  • #6
  • Nov 27, 2009 7:42am Nov 27, 2009 7:42am
Quoting MorningMania
Hi,

As a newbie in forex trading I try to stick to the 1day and 1 week charts for trading, as advised elsewhere on these boards. What I have found so far is that I quite often get the trend right but my s/l get hit by the short term noise.

Any thoughts on how many pips your stops should be for swing trading using the day/week charts?

Thanks for any advice or thoughts you may offer.
Much has been mentioned about your question. I will add my little piece too.

SL need to reflect your time period, therefore small stop losses on daily or weekly charts mean absolutly little in the greater scheme. You stop losses need to reflect the moment your executing or placing trades and where you are relevant to the areas of S/R.

There are a number of ways to play these areas. I personally look for a confirmation that support/resistance has held usually through the signs of price action and trade the break of that candle. This method has the advantage that it gives an opportunity to be out of the trade, by not having my order executed, if the price action is invalid. Another course of action is setting some limit orders at intervals towards S/R. This allows a mine field of orders that combined do not exceed your capital risk but capture early turns in the market.

For a new trader it is about trialing a few things, getting used to pulling the trigger and seeing how well you can manage a trade.

Some last bits of advice would be to concentrate on the major pairs or better still just A major pair. Dont fill your charts with all these fancy lines and rubbish that sound elegant like 'Stochastics". Unless you understand what they do, when they work best and why then you will just be adding a distraction and the most important aim for small goals. This is a journey not a race, take you time.

Razor
  • #7
  • Nov 27, 2009 7:48am Nov 27, 2009 7:48am
So I gave you one...

Pretty much everything I do, really. Especially liked this bit
Quote
Some last bits of advice would be to concentrate on the major pairs or better still just A major pair. Dont fill your charts with all these fancy lines and rubbish that sound elegant like 'Stochastics". Unless you understand what they do, when they work best and why then you will just be adding a distraction and the most important aim for small goals. This is a journey not a race, take you time.
I should have mentioned that myself. Haven't used any indicators for 12 months or more.
  • #8
  • Nov 27, 2009 8:00am Nov 27, 2009 8:00am
Thanks again, more good advice.

You're right about indicators. At this stage they mean nothing to me, I have already removed all of them as mentioned in peter's newbie guide. I think I read it about 10 times as I try to read as much as I can, next to observing charts that is.

In the end I would like to make some money with trading on the 1day chart. The minute by minute trading just doesn't seem like my thing, next to the fact that my regular job doesn't allow it. For now I am just happy learning new stuff and trying it on the demo accounts. I will look for a broker that offers 0.001 as well to try to set larger s/l without suffering a large drawdown.

Thanks again.
  • #9
  • Oct 5, 2018 6:06am Oct 5, 2018 6:06am
Quoting MorningMania
Hi, As a newbie in forex trading I try to stick to the 1day and 1 week charts for trading, as advised elsewhere on these boards. What I have found so far is that I quite often get the trend right but my s/l get hit by the short term noise. Any thoughts on how many pips your stops should be for swing trading using the day/week charts? Thanks for any advice or thoughts you may offer.
As long as the stop loss value is within your comfortable amount, it should not be much
  • #10
  • Oct 6, 2018 3:27pm Oct 6, 2018 3:27pm
Quoting MorningMania
Hi, As a newbie in forex trading I try to stick to the 1day and 1 week charts for trading, as advised elsewhere on these boards. What I have found so far is that I quite often get the trend right but my s/l get hit by the short term noise. Any thoughts on how many pips your stops should be for swing trading using the day/week charts? Thanks for any advice or thoughts you may offer.
Do you set your SL based on support/resistant levels or anything else? The parameter is very much important issue here!
  • #11
  • Oct 6, 2018 3:50pm Oct 6, 2018 3:50pm
Why are you necro'ing these threads? Last post here was 2009!


Quoting Prisha
{quote} As long as the stop loss value is within your comfortable amount, it should not be much
Quoting GeorgeBaile
{quote} Do you set your SL based on support/resistant levels or anything else? The parameter is very much important issue here!
The OP hasn't posted and been online here since late 2011!!! 7 years. Not sure he'll need this advice about SL, nor very likely to return to discuss how/where SL levels are set.

Get a clue, check the dates of the threads and messages you're responding to and use your heads a bit. It'll make this forum a bit nicer, helpful and informative.
  • #12
  • Last Post: Dec 26, 2018 6:04am Dec 26, 2018 6:04am
Quoting MorningMania
Hi, As a newbie in forex trading I try to stick to the 1day and 1 week charts for trading, as advised elsewhere on these boards. What I have found so far is that I quite often get the trend right but my s/l get hit by the short term noise. Any thoughts on how many pips your stops should be for swing trading using the day/week charts? Thanks for any advice or thoughts you may offer.
Well, I always set my SL based on the distance between the support/resistant level instead of time frame.
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