Discussion about how to Properly move your Stop Loss | Forex Factory

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Discussion about how to Properly move your Stop Loss

  • #1
  • First Post: Jan 1, 2009 3:48pm Jan 1, 2009 3:48pm
Hi Everyone,

I am looking for some advice from some of the veteran traders here and anyone else that can contribute. I find that I am having a problem with getting my profits stopped out early only to watch the movement to continue in my direction. So I am asking for advice from you guys and gals on what are your stoploss managment system when you get into a trend. I appreciate any advice and suggestion you can contribute to me and the others that will read this thread.

Thank You,
Z
  • #2
  • Jan 1, 2009 4:48pm Jan 1, 2009 4:48pm
After you enter a trade switch to heikin ashi candlesticks and move your stop to the top of the previous bar. Just make sure you stick to the same timeframe.
  • #3
  • Jan 1, 2009 4:56pm Jan 1, 2009 4:56pm
You might want to take a look at this http://www.forexfactory.com/showpost...6&postcount=28

Besides that it sounds like your running your stops too close to the price.
Same Whore .... Different Dress
  • #4
  • Jan 1, 2009 5:01pm Jan 1, 2009 5:01pm
Thanks Guys I will look the info over. I hope we get more peoples input on this issue I would like to see the different styles of trading that people excersise
  • #5
  • Jan 1, 2009 5:10pm Jan 1, 2009 5:10pm
Trailing Stop - Place a trailing stop once my open trade has broke even or profitable. Ajust the trailing stop every 10 pips. I usually like to give my trailing stop some room ... so I place a trailing stop 11 pips setting. Adjust accordinly to lock in profits.
  • #6
  • Jan 1, 2009 5:15pm Jan 1, 2009 5:15pm
There is evidence that Heiken Ashi is extremely risky, so watch who you listen to.

Quoting enochben
After you enter a trade switch to heikin ashi candlesticks and move your stop to the top of the previous bar.
Personally I trail my stops one pip at a time. I do not trail trades where I am going for 200 pips or less and risking 40 pips or less..... I only trail really large long term trades that have a huge stop.
  • #7
  • Jan 1, 2009 5:23pm Jan 1, 2009 5:23pm
Quoting Jhig
Trailing Stop - Place a trailing stop once my open trade has broke even or profitable. Ajust the trailing stop every 10 pips. I usually like to give my trailing stop some room ... so I place a trailing stop 11 pips setting. Adjust accordinly to lock in profits.
A 10 pip trailing stop won't keep you in the trade very long......
Same Whore .... Different Dress
  • #8
  • Jan 1, 2009 6:24pm Jan 1, 2009 6:24pm
I never use a risk/reward ratio of less that 1:1 and once the PA has moved 1/2 the distance to the TP I move my SL to Break Even.

best of luck
  • #9
  • Jan 1, 2009 8:06pm Jan 1, 2009 8:06pm
What you you guys are telling me is exactly what I was hoping to achieve by starting this thread I appreciate the responses. Thanks Everyone please keep it coming
  • #10
  • Jan 1, 2009 8:28pm Jan 1, 2009 8:28pm
Quoting blueace
I never use a risk/reward ratio of less that 1:1 and once the PA has moved 1/2 the distance to the TP I move my SL to Break Even.

best of luck
I never found anything like this to work very well. The market didnt seem to move in accordance with my account balance.
Living the adventure in my head.
  • #11
  • Jan 1, 2009 8:37pm Jan 1, 2009 8:37pm
Quoting Leonlorenzo
I never found anything like this to work very well. The market didnt seem to move in accordance with my account balance.
By doing this I more often have BEs than SLs. I prefer free trades and it sticks to the bit of wisdom of "never let winners become losers".
  • #12
  • Jan 1, 2009 9:14pm Jan 1, 2009 9:14pm
You might want to try "hanging" from the most recent high (longs) or low (shorts). I calculate the average true range for the past 5 time frames, double it, then use that number of pips from the most recent extreme price on the time frame I am trading.

This will tend to hold you into a trade longer, but that also comes with a cost. It works great in a trending market but not so good in an oscillating market. So if I think the market is oscillating I will use this method on the time frame just below the one a trade. ie, if I'm trading the houly chart, I will use the 15 min time frame for the stop, IF I think the market is oscillating.

If on the other hand I think the market is trending, I will use this method on progressively larger and larger time frames until I reach the day chart to "milk" a trend for as much as I can.

Just my opinion, but it works fairly well for me.
  • #13
  • Jan 1, 2009 9:34pm Jan 1, 2009 9:34pm
Quoting gspajon
You might want to try "hanging" from the most recent high (longs) or low (shorts). I calculate the average true range for the past 5 time frames, double it, then use that number of pips from the most recent extreme price on the time frame I am trading.

This will tend to hold you into a trade longer, but that also comes with a cost. It works great in a trending market but not so good in an oscillating market. So if I think the market is oscillating I will use this method on the time frame just below the one a trade. ie, if I'm trading the houly...
Thanks gspajon for your response I will check this out
  • #14
  • Jan 3, 2009 9:18pm Jan 3, 2009 9:18pm
I've never used trailing stop ever in my 2 years of experience of trading currency. So here is my dumb question, and apologize for those who will be agonized by it...

Lets say if I was to place a short at 1.3985, and when rate trails to 1.3965... If i place a trailing stop at 1.3975, will my trade be closed at 1.3975? Or will the trade continue to move according, only until the rate touches my trailing stop?
The reason why I am asking is, I've used the Hard Stop Loss, and If i was to place the Hard Stop Loss at 1.3975, that will automatically trigger the system to close my order at 1.3975.
However, I want a order to limit my loss and LOCK in my profits. Obviously the Hard Stop Loss will not work.
Thus, I am now looking for a order that will trail along my position long or short.
  • #15
  • Jan 3, 2009 9:48pm Jan 3, 2009 9:48pm
Quoting PipPipPip
Lets say if I was to place a short at 1.3985, and when rate trails to 1.3965... If i place a trailing stop at 1.3975, will my trade be closed at 1.3975? Or will the trade continue to move according, only until the rate touches my trailing stop?
The reason why I am asking is, I've used the Hard Stop Loss, and If i was to place the Hard Stop Loss at 1.3975, that will automatically trigger the system to close my order at 1.3975.
However, I want a order to limit my loss and LOCK in my profits. Obviously the Hard Stop Loss will not work.
Thus, I...
Your trailing stop will stop you out when your trade starts taking back pips--whatever number you decide.

The stop trails your position as long as the position is moving in your favor. Let's say you set your trailing stop at 30 pips on your short position opened at 1.3985. Your initial stop will be 1.4015. If the trade immediately goes against you, the stop will remain at 1.4015. If the trade moves in your favor, the stop will move with it. But it only will move one way like a ratchet. So if your initial short position opened at 1.3985 moves to 1.3940, your trailing stop will move to 1.3970.

In other words your trailing stop moves every time your profit reaches a new high water mark, thus locking in profits as you go.
  • #16
  • Jan 4, 2009 5:14am Jan 4, 2009 5:14am
You could also try moving to stop to the position of the parabolic sar every new bar. Not tried it myself but its an idea.
  • #17
  • Jan 4, 2009 2:29pm Jan 4, 2009 2:29pm
Quoting billflet
Your trailing stop will stop you out when your trade starts taking back pips--whatever number you decide.

The stop trails your position as long as the position is moving in your favor....
i cant seem to modify an Trailing Stop Order. Will i still be able to manual close an open position and CANCEL the trailing stop order?
  • #18
  • Jan 4, 2009 2:38pm Jan 4, 2009 2:38pm
when price is moving upwards, allow for one downbar to appear. level bar gets discarded.

e.g.

bar1: higher close than previous
bar2: higher close than previous
bar3: higher close than previous
bar4: lower close than bar 3 / stay in trade
bar5: higher close than previous
bar6: lower close than bar 5 /stay in trade
bar7: lower close than bar6 / close trade

for shorts the whole thing vice versa.

in an upmove also look for higher highs and lows. preferabely no lower lows. professionals have to support the low of each previous bar to keep the move going and stay in control.

this approach works reasonably well and with that you are on the supply&demand side of the market.

if u trade 50 tick or 1,2,3m charts u can get whipsawed out with that approach of course.

open your charts and do some backtesting and you will see the power.

also i would advise to use early partial profittaking to take risk off the table. e.g. close 50% of the trade at 150% of the stopsize. rest gest trailed.
  • #19
  • Jan 4, 2009 3:12pm Jan 4, 2009 3:12pm
Quoting billflet
Your trailing stop will stop you out when your trade starts taking back pips--whatever number you decide.

The stop trails your position as long as the position is moving in your favor....

I think i have an idea. So if it moves to 1.3950, my sl will not move because it has not yet passed 30 pips?
  • #20
  • Jan 4, 2009 4:42pm Jan 4, 2009 4:42pm
Quoting PipPipPip
i cant seem to modify an Trailing Stop Order. Will i still be able to manual close an open position and CANCEL the trailing stop order?
Yes, you can manually close your trade. To modify your trailing stop, simply close the trailing stop order and enter a new order with your new parameters.

To answer your other question: The first time your position moves in your favor, your trailing stop will adjust to it, even if its only a pip,or a fraction of a pip.
So if you opened your short at 1.3985 and you use a 30 pip trailing stop, it will initially be placed at 1.4015. Now if price moves 15 pips in your favor to 1.3970, your stop will move 15 pips also (to 1.4000). The trailing stop moves every time your trade reaches a new profit high. But it only moves one way. No matter how far price moves in your favor, your risk will never be more than 30 pips.
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