Stop loss to B/E: when? | Forex Factory

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Stop loss to B/E: when?

  • #1
  • First Post: Oct 30, 2005 4:49pm Oct 30, 2005 4:49pm
Hello everyone,

I keep reading that one of the priorities of in-trade managment is to move your stop loss to B/E as soon as possible once the trade is moving your way. My question is: when is the right time? what strategies do you all follow in this regard?

Cheers!
  • #2
  • Oct 30, 2005 6:15pm Oct 30, 2005 6:15pm
I have the same problem actually. I have tried several ways. I mean on one hand, your are securing yourself from loss, but on the other hand, the price might reverse after hitting your stop loss. Trailing stops might be more effective in this situation.
~If you fail to plan, you plan to fail~
  • #3
  • Oct 30, 2005 6:25pm Oct 30, 2005 6:25pm
move sl to b/e when it is out of reach of corrective movement...imho
  • #4
  • Oct 30, 2005 7:18pm Oct 30, 2005 7:18pm
I don't believe there is any hard and fast rule.... so its a rule that you're going to have set yourself... whatever that is.

Even away from corrective movements are subject to your interpretation.

Create a 'move to breakeven' rule that is accordance to your observation/comfort level.

For example, James16 indicates that he moves to breakeven fairly quickly or asap.

while others might move to breakeven after a certain number of bars, or do a trailing after 30 pips ... etc ..

I'm still working my one out, but generally its been move to b/e if I'm going to bed while the trade is live.. so that I can sleep well...
if I'm awake, i normally leave it at original...

Many possibilities ... something each of us have to figure out depending on our own style of entry/position sizing/exit/comfort level.

just my opinion ....

Ken
Trade what you see, not what you believe.....
  • #5
  • Oct 30, 2005 7:47pm Oct 30, 2005 7:47pm
Quoting khoong25
I don't believe there is any hard and fast rule.... so its a rule that you're going to have set yourself... whatever that is.

Even away from corrective movements are subject to your interpretation.

Create a 'move to breakeven' rule that is accordance to your observation/comfort level.

For example, James16 indicates that he moves to breakeven fairly quickly or asap.

while others might move to breakeven after a certain number of bars, or do a trailing after 30 pips ... etc ..

I'm still working my one out, but generally its been move to b/e if I'm going to bed while the trade is live.. so that I can sleep well...
if I'm awake, i normally leave it at original...

Many possibilities ... something each of us have to figure out depending on our own style of entry/position sizing/exit/comfort level.

just my opinion ....

Ken
let me give you guys an idea of what happened to me in september. as i have said the last part of the month was tough for me cause i did some stupid things that had nothing to do with stop loss placement they were just dumb trades. at the end of every month i go back and look at my trades. i look at them from every angle. some of my trades are based on trailing stops behind ma's to catch bigger moves. this is generally on 4 hr charts after i have taken partial profit at a set number of pips. when i trade 1 hr charts there has to be a certain level of feel involved even if the trade is based on a proven system. here is my point and it happens over and over on shorter term charts. for the month of september if i had just gotten out at 20 to 30 pips on every 1 hr chart trade i would have cleaned up. this is usually the case with me, here is why. if i wait for the right entry on a 1 hr chart i am going to get my fair share of trades. some are going to go 20 or 30 pips and some are going to go 100 plus. if i could get through my thick head that my entries have been proven effective and quit shooting for the moon i would have very few losing months. but like all traders i struggle with greed. i took 27 1 hr chart trades in september. if i had sold on every trade at 20 pips i would have been succesful 24 out of the 27 trades. on average these trades had an initial stop of 30 to 40 pips. some less. my problem like most all traders using smaller time frames is i get up 20 or 30 pips and start hoping for the moon. if i get out now its going to explode for 50 or 60 in 10 minutes. so if you have an entry technique that gets you 20 or 30 pips a large portion of the time why the hell do i care if it takes off without me. in fact if i move my stop to breakeven after a 20 pip move and it stops me out at 0 why the hell do i care about that either. what i should care about is

1. finding a way to trade that makes pips most of the time if i wait patiently for the right entry.

2. getting my stop to BE or taking profit soon just in case this aint the time its going 50 or 60.

3. i will use my longer term charts to hunt for entries looking for the larger moves.

blah, blah, blah,,, quit talking about it jim and JUST DO IT. i always have trading futures, i am learning that the forex game aint no different.
  • #6
  • Edited 8:48pm Oct 30, 2005 8:09pm | Edited 8:48pm
Quote

Originally Posted by khoong25

I don't believe there is any hard and fast rule.... so its a rule that you're going to have set yourself... whatever that is.

Even away from corrective movements are subject to your interpretation.

Create a 'move to breakeven' rule that is accordance to your observation/comfort level.

For example, James16 indicates that he moves to breakeven fairly quickly or asap.

while others might move to breakeven after a certain number of bars, or do a trailing after 30 pips ... etc ..

I'm still working my one out, but generally its been move to b/e if I'm going to bed while the trade is live.. so that I can sleep well...
if I'm awake, i normally leave it at original...

Many possibilities ... something each of us have to figure out depending on our own style of entry/position sizing/exit/comfort level.

just my opinion ....

Ken

Ken,

This my opinion too. Also, by inference of reading a lot of posts here on money management, I think that the prevailing wisdom is that there is a certain, if not set in stone, stop that should be placed when entering a trade baesd on the TA, and time frame that the trade is placed in. e.g., buy cable on a 30 min chart, stop might be 20-30 pips, buy cable on 4 hour chart, stop might be 60 pips. (numbers of pips just for illustration purposes). I hope to learn more about that in the PF.

The thing to do then is to move your stop /loss according the mindset you entered the trade in the first place. If you entered a trade with a 30 pip stop/loss and moved it to break even after a 10 pip gain, I think you might not be letting you system "do it's work" or, said in another way you might be defeating your own purpose. You also might have a target "take profit" in mind when entering the trade. If so, that might be the time to liquidate a percentage of your postion, and move your stop to break even.

These are just my thoughts as a trader wannabe right now so do not take them as advice. They are just what I am thinking at the moment. Just something to think about.

Anyone please feel free to correct me.

Jimmy
  • #7
  • Oct 30, 2005 9:22pm Oct 30, 2005 9:22pm
Trade management and scaling is a big subject. You want to study the ATR and the volatility of a pair first to understand its range. Then you want to identify the "time slices". Your time in the trade and chart periodicity must also be considered.

For example here is an example for the EUR/USD.[list][*] #1 Enter 1/3rd of your total entry with your method using a 60 pip stop and a 180 pip target.
[*] #2 When you advance 60 pips more enter 1/3 of your entry with a 60 pip stop and a 180 pip target. Raise your stop by 20 pips on entry #1

[*] #3 When you advance 60 pips more enter 1/3rd of your entry with using a 60 pip stop and a 180 pip target. Raise your stop on trade #1 by 20 pips, Raise your stop by 20 pips on Trade #2

[*]When you TP Trade#1, raise your stop by 20 pips on Trade#2, raise your stop by 20 pips on Trade #3
[*]When you TP Trade #2, raise your stop by 20 pips on rade #3

Rest and tell your self, Job well done if you make it this far..Its all in the entry and where your S/R is and possible "Ease of Movement" indications.

Also keep traack of your "Time in the Trade" on a spreadsheet and develop a rule to get ALL out, if it does trade according to what 80% of your MAE and MFE of your entry predicts.

Michael B.

  • #8
  • Oct 30, 2005 10:59pm Oct 30, 2005 10:59pm
I tend to find the reversals to happen more accurately, at 'doji' points .... or jim's terminology pinnochio bars. pin bars ..

although the stops you need to set to trade those are huge for a daily chart.



Hey Jim, I am having a major decision point ... whether do I take the 20-30 pips or is it possible to have my cake and eat it too? ie being able to catch the 100pip move???
I've had those 20-30 pip gain, then get stopped out, only for the move to go to 100pip ... of course I've also had those 20-30pip which I didn't move the stop higher, and get stopped out for a loss instead....

Ken
Trade what you see, not what you believe.....
  • #9
  • Oct 30, 2005 11:48pm Oct 30, 2005 11:48pm
Quoting khoong25
I don't believe there is any hard and fast rule.... so its a rule that you're going to have set yourself... whatever that is.

Even away from corrective movements are subject to your interpretation.

Create a 'move to breakeven' rule that is accordance to your observation/comfort level.

For example, James16 indicates that he moves to breakeven fairly quickly or asap.

while others might move to breakeven after a certain number of bars, or do a trailing after 30 pips ... etc ..

I'm still working my one out, but generally its been move to b/e if I'm going to bed while the trade is live.. so that I can sleep well...
if I'm awake, i normally leave it at original...

Many possibilities ... something each of us have to figure out depending on our own style of entry/position sizing/exit/comfort level.

just my opinion ....

Ken
Ken, I think you said it best. Each person will have to find rules or guidelines they can live with. Thanks for a very astute post!

Dial
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  • #10
  • Last Post: Jul 17, 2008 4:52pm Jul 17, 2008 4:52pm
Yeah depends on the strategy and the pair. I usually move to BE if I am up 50 pips. No use turning a winning trade into a losing one. Gotta test it out on historical data!
My financial freedom, one pip at a time!
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