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Stop loss in trend trading

  • #21
  • Jul 2, 2009 6:23pm Jul 2, 2009 6:23pm
Quoting DanUK

...so if you see an uptrend on your H1 chart then yes you are trading the trend...


PS... That's assuming one has properly recognized the trend, of course!!
  • #22
  • Jul 2, 2009 6:55pm Jul 2, 2009 6:55pm
Quoting DanUK
To be honest yes I think you can say you are trading the trend based on an H1 chart.

[color=black][font=Verdana]The trend is defined by the timeframe you use to trade from so if you see an uptrend on your H1 chart then yes you are trading the trend. Are you trading the long term trend... maybe not? Am I... probably not either! I guess it depends on your own point of view on the market. I would say that using 4 hour and daily charts and holding my position for a few days, I am a medium term trend trader!...

There are all kinds of different trends over all kinds of different time areas, you can actually see them better on the M1 chart cause you can see the price action that formed that 4H candle.

I can and do trade exactly the same trends, read of a M1 chart that other use a 4H chart for, likely much more accurately.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #23
  • Jul 3, 2009 3:03am Jul 3, 2009 3:03am
Quoting Turveyd
There are all kinds of different trends over all kinds of different time areas, you can actually see them better on the M1 chart cause you can see the price action that formed that 4H candle.

I can and do trade exactly the same trends, read of a M1 chart that other use a 4H chart for, likely much more accurately.
Well of course there are plenty of different ways to trade, but the question was linked with Jacko's method, and trading that way a 20 pip stop loss would not be suitable - bearing in mind that it is a trailing stop loss.
  • #24
  • Jul 4, 2009 5:00am Jul 4, 2009 5:00am
So a conclusion would be that SL depends on the chart your are trading on, because of the fluctuations of the market. If I would stay more than one day in a trade (I am not there yet ) a SL of 100 would sound good.

Thanks you all for sharing.
  • #25
  • Jul 4, 2009 5:18am Jul 4, 2009 5:18am
my understanding is that you have a bias on weekly T/F and zoom in to daily and H4 to find a support that you think it's hardly ever able to break down.

if it's really broken, then will use the anti hedging (see his 1st page of 'house' thread) to jump out but still hold the bias till market comes back.

if it does not come back then draw down is limited.

if it's in profit then use a trailing stop with a draw down size of what typically ends a weekly trend, something between 100pip for 1 week trend, or 200pip for 2 week trend, or 50pip for 2 day trend...

Quoting fxacs
Hello,

I started to read jacko thread about trend trading, as many of you recommended.

He mentioned at some point he is using at least 4h chart, everything below is just noise. Maybe it's true, maybe it's not. What I didn't understand was how can he enter a trade with a 50 pips SL ? I personally think a SL of 50 pips might work on a 1h chart, but not on 4h and above. The market (at least EUR/USD) can easily fluctuate with more then 50 pips.

How do you trade with trades? What time charts are you using and what SL?
  • #26
  • Jul 4, 2009 6:57am Jul 4, 2009 6:57am
Quoting Xaron
I use mainly weekly charts (if I use charts at all) and don't use stops.

Stop Loss is a great tool to decrease the risk.it's true that we can not use Stop loss in every trade, but Stop loss is required for some particular trades like if you are a swing trader then you have to use stop loss and scalpers always use stop loss.there is a gear role of Stop Loss in forex trading.
  • #27
  • Jul 4, 2009 7:04am Jul 4, 2009 7:04am
Quoting fxacs
So a conclusion would be that SL depends on the chart your are trading on, because of the fluctuations of the market. If I would stay more than one day in a trade (I am not there yet ) a SL of 100 would sound good.

Thanks you all for sharing.
Stop loss doesn't depend on only Charts, it depends on over all full tech. Analysis. it depends on market conditions that for how many times you can carry your positions for one day or one hour.
  • #28
  • Jul 4, 2009 7:39am Jul 4, 2009 7:39am
Hedge + Stop loss (100).The way to trade trend markert,From My Trading experience.enter trade at 8.00 GMT . the lets the trend determine your profit. If EU move 150 pips during London Open .Then your profit will be 50 pips.
No MA paython,No Bullshit Indicator ,No Color on my Chart. Just a Plain CHART and purely price action.
How ever there is a risk for this system if it Hit Both SL. But you know what what make you loss. When the market is ranging.
But it is better than INDICATOR trader and Technical Analysis Trader whose loss is due to WRONG ENTRY.

The Bigger the trend the BIGGER the profit because your floating is + pips
  • #29
  • Jul 4, 2009 8:28am Jul 4, 2009 8:28am
Quoting carl12
Stop Loss is a great tool to decrease the risk.it's true that we can not use Stop loss in every trade, but Stop loss is required for some particular trades like if you are a swing trader then you have to use stop loss and scalpers always use stop loss.there is a gear role of Stop Loss in forex trading.
I agree.
  • #30
  • Jul 4, 2009 5:36pm Jul 4, 2009 5:36pm
Quoting Xaron
I use mainly weekly charts (if I use charts at all) and don't use stops.
Xaron, i believe you use mental stops as opposed to hard stops.

Technically speaking, every trader/investor uses stops.

Z
  • #31
  • Jul 5, 2009 2:39am Jul 5, 2009 2:39am
Quoting zuret9
Xaron, i believe you use mental stops as opposed to hard stops.

Technically speaking, every trader/investor uses stops.

Z
Yes, you're right. Of course it's not a good idea to let positions run forever (losing ones). But using hard stops has never worked for me that good.
  • #32
  • Jul 5, 2009 2:45am Jul 5, 2009 2:45am
Quoting Xaron
Yes, you're right. Of course it's not a good idea to let positions run forever (losing ones). But using hard stops has never worked for me that good.
xaron:
do you think jacko's anti hedge might work? (on 1st page of 'house' thread) meaning he still use a s/l like -50 pips,
but if s/l is hit and runs south another -50pips, he then re-establish a long order where it's stopped/out,
if market reverse back and in favor of 1st order, then will re-enter the market as if no draw-down happened.

I am a little bit lured by the idea.
  • #33
  • Jul 5, 2009 2:54am Jul 5, 2009 2:54am
I don't know. It might work sometimes and sometimes not. Never tried it to "resurrect" a loss.
  • #34
  • Jul 5, 2009 3:12am Jul 5, 2009 3:12am
Quoting Xaron
I don't know. It might work sometimes and sometimes not. Never tried it to "resurrect" a loss.
he trades by following weekly trends and enter base on daily S/R reversal, there is no noise glitch really, but will have market random walks like -500pips by panic then come back.

a stop is -2% of acc so by theory he could be able to afford another -2%, coz if profit is hit in right direction it is usually a 500 pips running trend.

biggest problem we fear using a -200pip s/l is fear if market random walk touch the stop and go in right direction we bought.... but not using s/l will have a mental obstacle say resisting trend and enlarge the loss.

that anti hedge seems a good combination of drawdown and anti noise.
  • #35
  • Jul 5, 2009 12:02pm Jul 5, 2009 12:02pm
Jocko's anti hedge can work. He trades on the major trend like weekly - daily .
The stop is based on the premise that you are trading in the correct direction, maybe you slightly miss timed your entry.
Presuming that you are entering in the direction of the longer term trend it is expected that the trend will resume and pick your trade back up at the better level.. And it does.
If you are not trading in the correct direction then the trade will not be picked up and price continues to move away from your re-entry stop.
Be realistic, nothing work every time and you do not just keep placing stop after stop.
If certain conditions are met you place a anti- hedge once, you do not place another if the first fails. (accept your loss and move on)
that's my understanding...

and it goes with out saying his trade selection process is the heart of the approach.
  • #36
  • Jul 5, 2009 2:35pm Jul 5, 2009 2:35pm
Your better off IF the trend direction still holds ( presuming long ), averaging down upon further weakness sensibly though ofcourse.

If the market drops 100pips after your first entry and the trend is still up it's madness not to take advantage and get some more long.

Ofcourse, the second your chart says your against the trend you've got to take your loss and walk away and it could be big money.

But on the same note, you could get +500 (1) then +400 on the second position and your making alot more money.

If left to go against trend this will wipe your account!!
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #37
  • Jul 6, 2009 5:50am Jul 6, 2009 5:50am
1. Is it really a bad thing to trade against major trend given by D1 and W1 charts?

For example, on EUR/USD, the D1 chart shows an uptrend that slowed down a little, maybe a reversal will soon occur. But on H1 I have a clear downtrend, so I opened a position. Is it a bad approach?

2. How fast are you usually getting the trend? How many pips do you miss until you are almost sure it's a trend in a specific direction and open a position?
  • #38
  • Jul 6, 2009 6:28am Jul 6, 2009 6:28am
Quoting fxacs
1. Is it really a bad thing to trade against major trend given by D1 and W1 charts?

For example, on EUR/USD, the D1 chart shows an uptrend that slowed down a little, maybe a reversal will soon occur. But on H1 I have a clear downtrend, so I opened a position. Is it a bad approach?

2. How fast are you usually getting the trend? How many pips do you miss until you are almost sure it's a trend in a specific direction and open a position?

It's a bad thing to trade against the trend FULL STOP but I'm using M1 60sma and M1 540sma for my trend study as they reflect the kinda move I'm after so you've got to work out what trend works for your average hold length, D1 and W1 is meaningless to me.

2. Picking bottoms / tops will always be against the trend, so high risk and if waiting for a turn you can wait for a long time, so you have no exit when the trend turns strategy so got to learn to give up on tops and bottoms.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #39
  • Jul 19, 2009 9:30am Jul 19, 2009 9:30am
The use of the ATR to find your SL size is a very good method.
It works for all TFs.
Currently the SL for the EUR/USD....
Daily... 139 pips
4Hr..... 51 pips
1Hr .... 22 pips
Same Whore .... Different Dress
  • #40
  • Last Post: Jul 28, 2009 7:18am Jul 28, 2009 7:18am
Quoting johnedoe
The use of the ATR to find your SL size is a very good method.
It works for all TFs.
Currently the SL for the EUR/USD....
Daily... 139 pips
4Hr..... 51 pips
1Hr .... 22 pips
Can you please explain what is ATR? which the SL values for GBP/USD pair?
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