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The best idea for stoploss?

  • #1
  • First Post: Edited Jul 6, 2024 11:49am Jun 1, 2024 11:40am | Edited Jul 6, 2024 11:49am
option 1. by percentage of total equity. e.g 50%
option 2. by pip e.g 500 pips
option 3. by times of TP. e.g 5 time of TP.

which option works best? any other better options. thanks
  • #2
  • Jun 1, 2024 8:11pm Jun 1, 2024 8:11pm
Setting a stop order by any of the above methods is somewhat arbitrary and often causes frustration when the market finds your stop. Determining what level to place a stop is a little more involved than simply placing an order "out in space" and hoping the market will go the other way. I have advised many of my students to follow some of these steps:

  1. What has "created" or caused you to enter this trade? Most traders have a set of criteria or conditions they recognize that favors a trade in one direction or the other. Thus if this is the case with you, then consider identifying also what conditions must exist for your to consider your trade to be "invalid". Where does price have to go for you to say, "...ooops I guess this trade isn't working..." Place you stop there. OR
  2. Use the most recent swing point or inflection point (in the opposing direction) and set your stop just beyond it. Ex: If you have entered a long, place your stop below the last bearish swing low point and vise versa for a short. This style also requires a bit of fineness because the market seems to delight in seeking out stops and targeting them. The swing points are the most obvious places for the market to "test".
  3. Finally, if any of these ideas requires a stop too big to fit into your risk management plan for contract sizing, consider NOT trading, as you may be entering too late and the market may not go as far as you think it will before it retraces. I call this "the F*** Y** stop", others call them "crazy Ivan". I try to anticipate when these will occur and then wait to enter until one of these is just about finished. Then your stop can safely be placed under the swing point formed by these moves, and it is usually MUCH closer to your entry.

Hope this helps some.

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  • #3
  • Jun 1, 2024 8:25pm Jun 1, 2024 8:25pm
you are confusing a few things that needs to be clear; first of all:

Quoting phrixusong
option 1. by percentage of total equity. e.g 50% option
this is how much of your $$ available you put in lot size, is not related to your stop loss size IN PIPS

Quoting phrixusong
2. by pip e.g 500 pips option
Pip size, NOT how much $ you put on the line (different right?)

Quoting phrixusong
3. by times of TP. e.g 5 time of TP.
This is a "ratio" between whatever SL size vs what you "want" to profit.. again completely different and unrelated to the previous examples !!

Quoting phrixusong
which option works best? any other better options. thanks
The Stop loss size should be a just a bit above/below the highest/lowest possible point in that exact moment in the market (and entry point) and it should be as small as possible.. IF IF IF you the time it right of course!!! why? because just a bit above/below if the price turns back on you then you were "wrong" on your chart reading and the market wasnt going to pick that direction anyway (lol)

IF the planets align the SL in pip size will result in a LARGE lot size for whatever % you chose to gamble per trade.. And by nature your sl to tp ratio is going to be BIG

See how everything takes care itself once you understand every concept separately?? =)
  • #4
  • Jun 1, 2024 10:01pm Jun 1, 2024 10:01pm
Don't use one!



When the pain of losing just 1 more dollar is more than the pain of being wrong, you will exit.



Follow me for more great trading advice.



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It takes a lot for me to IGNORE you, but you can try.
  • #5
  • Jun 1, 2024 10:40pm Jun 1, 2024 10:40pm
Concentrate on avoiding mistakes. Then your losses will be small.
1.02^200
  • #6
  • Jun 2, 2024 1:26am Jun 2, 2024 1:26am
Quoting phrixusong
option 1. by percentage of total equity. e.g 50% option 2. by pip e.g 500 pips option 2. by times of TP. e.g 5 time of TP. which option works best? any other better options. thanks
Backtest your strategy and your'e find the right answer there.

Generally for me, I just want top hit the Break Even tab as soon as possible so it becomes a stressless trade.
But as a Stop is needed, go by the ATR of the market / time frame you trade and use 2 for general scalping or trading.


50% Win Rate is all you need so fall in love with losing trades - it stops you doing stupid things like averaging down or moving stops like the 90% of the losers do.
Trading thin liquidity at the boundary of the charts
  • #7
  • Jun 2, 2024 2:39am Jun 2, 2024 2:39am
Quoting phrixusong
option 1. by percentage of total equity. e.g 50% option 2. by pip e.g 500 pips option 2. by times of TP. e.g 5 time of TP. which option works best? any other better options. thanks
your question is not specific enough. You should have a stop loss strategy, which fits perfectly to your trading strategy and money management. From my personal experience most people who use fixed SL ratios are losing longterm if they don’t consider overall market circumstances and structures. If you place your stop loss for example always above last swing high or below last swing low, the chances are high, that the price takes out your stop and then reverses. I use for my personal trading strategy a hard stop for all trades in the basket. But it is never at a fixed percentage of equity. It depends on so many things. Try to not generalize things like stop loss and take profit taking so much. It takes much more to be a professional and long term profitable trader.
  • #8
  • Jun 2, 2024 3:14am Jun 2, 2024 3:14am
this is simple you write down all the stoploss thats been taken by them from your account you then wake up when you see how much you gave them , all the books and brokers recommend you use a stoploss your giving them a bonus of course they would say that
people leave, but this thread will go on for ever
  • #9
  • Jun 2, 2024 3:54am Jun 2, 2024 3:54am
Quoting phrixusong
option 1. by percentage of total equity. e.g 50% option 2. by pip e.g 500 pips option 2. by times of TP. e.g 5 time of TP. which option works best? any other better options. thanks
IMPORTANT:
Stop Loss should always have the trigger price set to the other side: i.e. for long trades ASK, for short trades BID. Otherwise your stops can be hunted down by arbitrary spread spikes, without the broker even manipulating the middle market price. Honest brokers give you the possibility to set the trigger price. If they don't, they are a bucket shop wanting to have the possibility to hunt your stops.
Most market makers do not give you this possibility and automatically set the trigger price to the same side of the position, so that they can trigger your stops whenever they want to.

SL level should be according to the followed strategy; a function of:
1. Effective leverage of your position (Pip value in relation to the size of your equity and the level of acceptable loss)
2. Average spread & expected average slippage
3. Money management strategy
4. Market rhythm (your observed and targeted wave length and amplitude OR the ATR of your trade's planned time length)
5. Support & Resistance levels

The exact calculation of the SL price level has to factor in ALL these considerations.
For example for my Low Frequency precision Scalping strategy with an effective position leverage of 1:100 I use a SL of 2.5 Pips away from the trade entry price, following ALL these considerations. These 2.5 Pips give me an effective loss of the value of 4 Pips if triggered (including slippage and paid commission to the broker)
Longer duration strategies should have completely different SL levels.
  • #10
  • Jun 2, 2024 8:18am Jun 2, 2024 8:18am
Why arn't you guys talking about take profits? You always claim to win, so...
The best stop in retail forex is not to take a trade.
  • #11
  • Jun 2, 2024 9:53am Jun 2, 2024 9:53am
Quoting HudithePfupf
Why arn't you guys talking about take profits? You always claim to win, so... The best stop in retail forex is not to take a trade.
Happy Trolling!!!
  • #12
  • Jun 2, 2024 1:41pm Jun 2, 2024 1:41pm
Quoting HudithePfupf
Why arn't you guys talking about take profits? You always claim to win, so... The best stop in retail forex is not to take a trade.
the simple answer to your obsequious question is that the thread asked a specific question about stop loss placement. If this individual wants to know about taking profits he/she need only ask the question.

As many who have commented here (including me) have stated this whole subject is only a small part of a larger plan for risk management. But again that was not the originator's question.

The question for you would be have you actually read the posts here? Or are you just agitating?
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  • #13
  • Jun 2, 2024 4:54pm Jun 2, 2024 4:54pm
Run all those scenarios through an Algo to see which settings would be more profitable.

Or just trade without a stop is fine too. As long as you're able to define risk.
ForexOrderFlow.com Return This Year: 10.8%
  • #14
  • Jun 2, 2024 9:42pm Jun 2, 2024 9:42pm
Quoting HudithePfupf
Why arn't you guys talking about take profits? You always claim to win, so... The best stop in retail forex is not to take a trade.
Profit will take care itself
Put on your Condom (SL) unless you want to get her pregnant (Acc Blow)
  • #15
  • Jun 3, 2024 6:30am Jun 3, 2024 6:30am
Hi, interestingly I made a short video about Stop Loss Check it out, and I hope to make the 2nd part sometime this week. :
Inserted Video
The key is to do what you know
  • #16
  • Jun 3, 2024 9:52am Jun 3, 2024 9:52am
Quoting phrixusong
option 1. by percentage of total equity. e.g 50% option 2. by pip e.g 500 pips option 2. by times of TP. e.g 5 time of TP. which option works best? any other better options. thanks
1. If you lose 50% of $100, you are left with $50. To get back to $100 you need a 100% gain to return. If you lose 30% then you need approximately a 42.86% gain to return to $100. If you can easy gain >43% monthly then you can set your SL to 30%. Now you can easy calculate what will happen if you will have 3 stops in a row. Cool down and put your calculator away. The answer is zero. You will lose all.

2. This makes no sense because "pips" are different from asset to asset.

3. This makes no sense too. Try to code simple script and check if your strategy is profitable with that logic. I can bet that it is not.

I'm full time trader and coder and I have a team of traders and coders. We are working hard using all the power of math, AI and so on. And there is no positive expectation in using stop losses. We are using hedge instead. Hedge works. Stops not.
Observer effect
  • #17
  • Jun 3, 2024 12:02pm Jun 3, 2024 12:02pm
Quoting ryuryu
{quote} 1. If you lose 50% of $100, you are left with $50. To get back to $100 you need a 100% gain to return. If you lose 30% then you need approximately a 42.86% gain to return to $100. If you can easy gain >43% monthly then you can set your SL to 30%. Now you can easy calculate what will happen if you will have 3 stops in a row. Cool down and put your calculator away. The answer is zero. You will lose all. 2. This makes no sense because "pips" are different from asset to asset. 3. This makes no sense too. Try to code simple script and check if...
A hedge is the same as using a stoploss and then placing a order in the opposite way with the same size, so how does stoplosses not work and hedge work?
  • #18
  • Jun 3, 2024 12:32pm Jun 3, 2024 12:32pm
I think a well chosen Stop Loss is much more important than most believe.
I use it as a strategic tool. It is my primary filter for choosing a trade entry.
That means that instead of entering trades based on signals and setups and choose a corresponding SL to it, I try to take only those of all possible entries that sensibly permit setting a SL that corresponds to my risk management requirements. So I define the SL first, than the trade that corresponds to it, not vice versa.
  • #19
  • Jun 3, 2024 7:45pm Jun 3, 2024 7:45pm
Ultimately this is why most traders fail to become profitable. Focussing on how big or small a loss should be isn’t the X factor - it has no long term effect on traders profitability.
All our time and energy needs be to redirected into developing strategies that let winning trades run as long as possible.
Here is an example on a strategy I have been back testing the last week ( hobby out of mine to test strategies) that runs a Super Trend indicator on Renko 9 on the NQ futures markets. It loses 65% of occasions and will often run drawn downs of 3 to 5% before throwing in a few 5 to 8% winners allowing the days profits to often exceed 10% a day IN TESTING.

My point to this post is your time is better spent developing strategies that let suckers run, in between taking quite a few losses.

ONE HUGE trade win a week is all you need, just try and break even with the rest.

Stop Loss size therefore becomes irrelevant - unless of course you are one of the prop boys dreamers trying to keep with guidelines even Warren Buffet would fail.
Trading thin liquidity at the boundary of the charts
  • #20
  • Edited 3:56am Jun 4, 2024 3:25am | Edited 3:56am
Quoting RickM
Ultimately this is why most traders fail to become profitable. Focussing on how big or small a loss should be isn’t the X factor - it has no long term effect on traders profitability. All our time and energy needs be to redirected into developing strategies that let winning trades run as long as possible. Here is an example on a strategy I have been back testing the last week ( hobby out of mine to test strategies) that runs a Super Trend indicator on Renko 9 on the NQ futures markets. It loses 65% of occasions and will often run drawn downs of...
Right.
You have just demonstrated you have no idea about Low Frequency / High Leverage scalping.
What you write could very well be profitable with other strategies, yours particularly; I do not argue against it. Each strategy needs a corresponding risk management.
Mine obviously would not work with yours.
If you like, let your "suckers" run, I don't care. I personally would not want to face a 65% draw down on my equity. If you tolerate that, power to you.

BTW I use my strategy on my live account and not with demo or testing. If you are an experienced trader, you should know that backtesting results are quite different from forward testing results. And live trading is very different from both.
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