Ideal Stop Loss

Hey guys, I came up with a really rough trading system that I want to start testing on Monday and I was wondering what you guys suggest for initial stop loss. I'll be trading on 4H charts and I will be using a break-even strategy.

I'm looking into ATR based stops. Would you guys recommend ATRx2? x3?

As for the system, entry is MACD based and it uses Supertrend for exit.

learn to program an ea and then optimize the sl

I wouldn't recommend optimizing SL to the past data. ATR-based stop-loss looks much better. You should choose the ATR multiplier depending on how long-term your strategy is.

Hey I'm working on this too, need more opinion please...

I'm also backtesting on 4H chart, thought about 2 options:

1. using a fixed SL for all trades: eg.50 pips on Eur/USD since that's the average size candle found using ATR

2. an idea from another trader is to use last high/low as benchmark

But I find that for example your last high/low is 250 pips, that just doesn't make sense also compared to a fixed reasonable SL, our winrate would then be higher?

help pls!

i dont think you can systematically set an ideal stop loss. Stop loss depends on your trading method. For example, if you are trading simple resistance and support, your stop loss for a long position should be a little below the previous support. If you just hard-coded a support in your method, this stop-loss might not be realistically useful in all situation.

you can determine your stoploss by risking a certain portion of your account balance per trade as your HARD Stoploss, and then if and only once your trade is at profit you can other methods, such trendlines, Psar, MA, Candles hi,low, atr etc.

Stop loss value depends also form your ratio between SL and TP.

There is general rule, you should not risk more than 5% of your deposit per trade. So you can count on this.

Ideal SL is 1-2% off your balance if u keep that in mind you will be profitable if u risk more you will lose

Go for 50 pips.

Check max 7 SL x 3pip (on one level).
I use this method for 4 hours and works very well.

eur.usd today trade.

The ideal thing would be not to use Stop Loss at all, but still, limit your loses just as if you were using a stop loss.

And yes, it’s possible… its public knowledge (among hedge funds)…

Quantrader

You'll get a ton of different answers. Some will be based on the users own experience, some will be based on what that user read, some will be based on what the user just came up with on the spot.

I scalp, so I can't speak for longer timeframes, but what works for me is to use a max mental stop of 6pips, though I usually bail on a trade at -1 to -3 pips. No profit target. Just let it run. If price stalls or reverses, bail.

You'll have to experiment to see what works for yourself. Though a good guideline is to use a max stop of 1-2%, but place the stop where price has shown s/r. So you may have stops that are only .5% at times, and will vary. But never go over your predefined limit.