What do you think the best Stop Loss is for daily trading? I say...

What is the best and most safest stop loss limit for daily trading I say 30 pips because if you buy/short a currency and it passes -30pips in most cases it will go higher than that too... you tell me your number and why????

The best stop loss has too many variables to define in a simple answer. It can be based off of Support and resistance of recent prices, a backtested fixed value for the instrument you are trading ( i.e. 40 pips for EUR/usd , 60 pips GBP/USD), a predefined system, whatever you are comfortable with, the timeframe you are analyzing Risk/Reward Ratio, fibbonacci numbers and many more.

The best I have ever seen were combinations of some/all of the above

I believe that you must do the analysis of the market in order to find the best stop for that trade.

The best stop is the one placed outside of the current intraday trading range.

Depends on the range of the currency. 30 pips is too small in my opinion for GBPUSD but may be ok for EURGBP.

I have been using the previous high/low but I am tinkering with using ATR.

The MAX of "Bad Trade, Get out" and how much you are willing to {or can afford to} Lose ON THAT PATRTICULAR TRADE ! ! !. Period. Stop. {loss}

Get Smart. It's your money and you are asking me {the entire FF team, } for advice ? ? ? The groundwork has been carefully figured out and posted {@ the Highway Onramp for freshmen} Show some respect for those that done this and actually read what they were willing to leave behind as bread crumbs or clues for you.

On the other hand...
If you have some evidence that a 'Daily' 30 pip SL will work...
I'm an alien... I'm all ears.

Depends a lot on your style but I think if you're trying for a reasonable shot at catching a trend for 500 then you need atleast 30 pips of wiggle room on the EURUSD. Im just talking out of my ass though cause i'm not a long term trader.

I think an equally important question is where do you set your TP? You could get the same answers though that it depends on the situation. No one ever went broke taking profits though.

This is about the worst advice a trader can ever hear. I can give you thousands of scenarios were taking your profits will put you in the poorhouse in short order. You would do well to forget that string of words ever existed.

You may want to check the range, just look back at candles, that the pair has been moving in over the last long range timeframe and select that number. Take the daily range and add some pips. Get to know the pair, how it behaves.

And / Or, decide how much you could stand to loose based on your attitude and account balance. Make that your 'catastrophic stop loss' . For example 200 pips ??? Let price go against you and come back. using the first idea above.

As price moves back in your favor, put on more trades.


Lou

Your stop needs to have a meaning, not just a random number. To put it bluntly the market doesn't care about random numbers on a chart, or how much you personally want to risk on a trade, it will move where it wants to move. Stop placement can be technical, fundamental, or volatility based.

You're basically looking for an edge in your stop placement just like your entry. Since markets obey trend lines, support and resistance it would make sense to place stops outside of these places. Currencies are also very volatile so it helps to place your stop a certain price percentage outside of these places to avoid false breakouts.

I try to place my stops away from major numbers ending in 00. I came to realize that many of my stops were being hit when they were placed too close to these numbers.

You can also place your stops based on the volatility of the market you are trading. If your stop is placed outside of the normal market range you have a better chance of your stop not being hit. Don't focus on hitting tops and bottoms. Place your stops where you know that if they are hit that the market sentiment has changed.

Stop placement is one of the most important aspects of trading in my opinion. Incorrect stop placement can destroy any great trading system.

As a general rule of the thumb, I place my stop behind the event that made me take that trade. For example, if I am taking a pure trendline trade, then the stop has got to be behind the trend. If I am taking the trade based on a hammer candle formation, then the stop gotta be behind the hammer. If I am basing my trade on a price channel breakout, then the stop gotta be behind the channel boundaries, etc.

I am personally against placing wider stops than necessary. In my opinion, if the event you based your trade on is violated, then your entry timing was clearly off and you better get out of the trade and wait for a re-entry opportunity.

Hi, Agreed

After thousands of hours looking at backtests of various systems, one conclusion I've come to is that taking a profit too early will in the long term ruin a system's profitability.

For a particular system, you need to max out your profit for each trade by following the rules, and never take it early.

Best regards
Alan

I agree ! and without going into great detail, I mentally count Flat Trades in the Winning Column. I don't worry about the Winners. Why should I? I worry about the ones that cost me money and try to eliminate them.

Let Your Profits Run... Of course it is great advice but there are numerous reasons {and I implemented one of them as recently as 24 hrs ago} to say... "I may be leaving some on the table, but I'll take my Profits now thank you Sir."

A Gung Ho attitude usually dies young.

Perhaps the members suggesting that you should milk every Trade for all you can get out of it are honestly offering what they feel to be good advice.{i'm sure they are} But I feel that this is part of the Psycological Learning curve also. Losing Profit can be just as mentally devastating as losing capital. Play{oxymoron?} where you are comfortable and let YOUR comfort zone grow at YOUR pace.

I often wonder if the oft quoted 95% number will drop due to advice available on the web or if it will rise due to peer pressure OR, if like Fibs in Nature, It will remain unchanged.

I have been looking into "Average Daily Range" as a stoploss. I am always wondering just what traders are talking about when they say "average daily range" or "daily range".

I currently use the ATR indicator set to 14 days on daily timeframe to determine this variable- Average true range it is different from daily range- but that is a entirely different topic!

A example of what I am getting at for a stoploss and a Profit Target is this example:

From the day opening to the Asian Session many times 30 min timeframe usd/chf and many crosses will stay horizontal in a tight 20-30 pip range. Right after the New York open or later it will usually break out into a trend(many times after a slight previous fakeout in opposite direction). A take profit for this trade can be the daily range etc.

Bemac has a open daily range indicator in vttrader that can be used for this trade. In the indicator he says to take profit at 60% of daily range. Again daily range is used.

I have found that most of the intraday setups I use- have stops and profit targets based off daily range.

I am asking other traders for advice on how to determine a viable Average Daily Range. Like I said earlier I use the ATR indicator at 14- Should I increase the length to 30(month)? Does a better indicator work or better method work for this function?

I was thinking about making a new post for this but I saw this thread started and it is similar to my question- I hope it is not to much off topic.

TY

the 60% was an attempt to ensure followers were winners. I actually use 95% as a param. {sorry for the interuption}

Bemac- I usually put it on 90%- how does the indicator determine daily range?

I looked at the formula and I am assuming it gets the number from the "highest high" to the "lowest low" of the prior day? I am not a good programmer but it appears it is taken this way?

It measures the data availble on your chart. It requires a minimum of 3 days of data to plot. and then measuers the distance between {user input} start Time Open to < Start Time Close to calc Daily Range.
Basically, think of it this way.
If the difference between the Low of the Day & the High of the Day is 150 Pips, I want a bunch o' them.

Yea taking profits is the absolute worst advice a trader can hear. Right. I can give you a thousand scenerios+1 where not taking profits puts you in the poor house in even shorter order. I win.

It actually is determined by how much information you have on "YOUR" chart. But you are right. It looks for the difference between the DAILY Highest High to Lowest Low of All Info on Chart.
It takes the Widest Daily Range {let's say 175 pips} and the Narrowest Daily Range {let's say 25 pips}and takes an average of those 2 numbers. {not a MOVING Average. A Median Average.}