Question about setting stops

I am demo trading at the moment - higher TF (H1,H4,D1 using M5 to confirm direction at entry). I have read Carter, Murphy, Ponsi, Silvani and enough online articles that I believe I am able to begin distilling the 'truth' from common threads.

I am having a problem setting stops properly for non-trending trades (I use Ponsi's FxEd for trending trades - works for me more often than not). I initially used a flat 50 pips but that was not enough room. I then went to using 50% of the ATR at time/TF of entry. This can range to several hundred pips and is just way too much at times. Here are this morning's trades (3-Aug-2011):

Open Time Type Item Price S / L T / P Close Profit
--------- ---- ---- ---- ----- ----- ----- ------
2011.08.03 08:16 sell eurchf 1.10369 1.11450 1.10207 1.10203 215.73
2011.08.03 09:43 sell eurusd 1.42898 1.43071 1.42820 1.42818 80.00
2011.08.03 08:15 sell usdjpy 77.024 76.950 76.673 76.951 94.87
2011.08.03 10:08 sell eurchf 1.09442 1.09542 1.09000 1.09542 -130.55
2011.08.03 08:15 buy gbpusd 1.64001 1.63710 1.64620 1.63710 -291.00
2011.08.03 10:36 buy audusd 1.06865 1.06870 1.06900 1.06867 2.00

These were all traded on the H1 TF. I get that it is unwise to pick a hard and fast SL (since different pairs have different volatility) but there has to be a better method than .5 * ATR! These two bad trades wiped out the morning's profits (one was a retracement bet, the other a channel trade).

Is there a better way?

TIA -

jh

Chart based/technical stops, maybe (trendlines, horizontal support & resistance, etc.).

The biggest caveat is that newer or inexperienced traders tend to block their stops together in areas where they think "this is far enough away from my entry and a good technical area, it won't get stopped out or if it does it's because the market is reversing" and then they get stopped out by a few pips before the market resumes a move that would've made them money. Take that for what you will.

When I am using pivots or Fibo retracements, I use support and resistance for stops. They more or less work; but for the higher TF support or resistance can be kind of far off - that was why I had gone to using ATR/2. Perhaps the trick is to use S and R from a lower timeframe?

Try to see the charts and price levels, and dont make science from it, you will see that it will work...;-)

Your answer sounds (to me) as if you are also suggesting support and resistance levels. Perhaps I need to combine them with trend lines?

My view is, SLs are put in the system to protect your capital and to limit your losses.

According to your last statement, your bad trades have wiped out your early profits...

Do you really think you have revisit your SL method or your Entry itself.

Ok.Coming to SL suggestions,I will explain you what I used to earlier.

After I enter my trade, I know my SL. What I will do is, after my entry I will switch to 15mts chart and wait for one candle to close below my SL. Then I will close my Trade manually. I actually started doing this after noticing that, so many times, the low of a candle would just come down, clear my SL and then go up. So was the case with Sells too.....high would come , hit the SL and then fall freely.

I used to follow this method very nicely for quiet long a period saving lots and lots of SL hits. You may want to try that if you liked it.

Thanks
Ansi

That is interesting; i read in August Silvani's book about banks colluding by coincidence to hit obvious stop levels and take the commissions. Were your stops at even numbers?

My method depends on the trade. Today I am up 1100+ pips including a 537 pip loss. I set the loss via ATR/2; I wonder if I should simply have a hard ceiling of 200 pips or so (I trade H1 or above TF) as a rule; that will account for a certain amount of volatility. Just trying to nail this piece of trading down...