help me on stop loss!

can any body please suggest me any book or technique to set stop loss?

i am a swing trader and on a particular trade i trade for like 50 pips or less then that.any help will be appreciated.

If you're swing trading, wouldn't you have some idea already of the range you're trading within? In which case, there are various scenarios to consider. Let's consider: what/which pairs are you trading, and for each, what is/are your criteria for entry, and what duration candles are you watching?

read any book about trading strategy, they all have setting stop loss section---except which written by those who thinks stop loss is for sissy.

even if the timeframe use in the strategy isn't daily, guess you could grab some ideas out of them.

I watch 4 hours candle....50 pips is a decent stop isnt it?

whats your view?

50 pips is a "reasonable" stop only if considered in relation to what you're actually trading (or testing):

It would be "reasonable", for example, if the $ you're going to potentially lose is not more than 1% of your trading capital; AND

If 50 pips allows for retracements - price action needs to "breathe", to regroup, to build energy for the next push. Have a look back over the last ten or so retracements and ask yourself if 50 pips is going to cover at least DOUBLE the average of these retracements.

Ask the Mkt. what is the proper SL on a given trade. It sounds general, but it s true. Where are the orders? What should happen to activate them?
Think...

There is no fixed Stop Loss Value that works on all time frames or on all pairs, each pair has it's own unique style of trending and how deep the retracements are.

I personally use Stop Loss from 50-200 pips depending on the trend, it's best to look for a strong S/R level and put your stop behind it, this will be considered a decent stop.

Hi, I think that your SL should not be fixed at, let's say 50pips.

If you are a swing trader, you probably have your own criteria for entering a trade. The same criteria should tell you that: at this level I expect a reaction or continuation and my expectation would not be valid anymore if the price goes past "x" level. That's where your stop should go, regardless if it is 20, 60 or 80pips. To let the market breathe, you have to allow the required space.

Although, is very important that you can see the level of your stop, before entering the trade. You probably set a target of profit for your trade. When you do that, is the relation between risk/reward acceptable? because if you are risking 50pips, but you have to take profit in 30pips, as a recent level of sup/res is formed, is it really worth the risk?
As a swing trader, regardless the amount of pips of your SL, you have to pay attention at r/r, which should be at least 1:2 to consider the trade a good set-up.
Also remember that you shouldn't adjust the stoploss to make you feel comfortable, but the lot size. Stop loss is given by the price action, its highs and lows etc. then, it's the trader that needs to adjust the lot size according to the trade.
Hope it helps.

To be honest i dont really think setting a "fixed" stop loss of a certain number of pips is actually a good idea.

markets always change, so i think we need to adapt as well.

You need to do some studying. You should know the various methods of exits.

I suggest you look up volatility stops. They're flexible, work on any time frame, and unlike other types of stops, they actually have some relationship to the pair and its typical movement.

Investopedia has lots of good info, you can subscribe to a daily email ...

Sample article on different types of stops:

http://www.investopedia.com/articles...XMoneyMgmt.asp

I always set my stops at the last swing low, for longs and the last swing high, for shorts.

What you may need to be more concerned with is position sizing....... that will take care of your stops and potential rewards.

Position sizing should NOT determine your stops. Your stop determines your position size.

There are too many good answers in this thread. but the right answer depends on the trader's time frame and also the way he or she trades.

We as trader can use the previous swing high as stop loss in downtrend and swing low in uptrend as a good area for stop loss. Now if someone is using 5min TF can have shorter stop loss than 15min and 15 with 1 hour TF etc.... so all the answers are right.

How far is the stop loss determens how big your position can be according to how many pips and how much in value in dollars or whatever you are trading to figure out the position size.

Great short thread with the right answers in one page .

Also knowing where to place your stop loss will make you successful in the long run. Good luck all

Stop loss is very effective for new traders. But to use it, you need proper knowledge and education.

Right. Also depend on how much you want to take risk on that particular trade.

There is no alternative to knowledge and skills. If all these were profitable for long term everyone would make money in trading. Only the fittest people survive here for long term. And to be fittest no alternative to being skilled.

Placing stop loss is one of the difficult tasks in trading. So many things to consider. Your trading style, risk tolerance capability and good knowledge about support and resistance levels are important to place a stop loss.