1 trade with big SL OR reenter market several times with smaller SL? | Forex Factory

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1 trade with big SL OR reenter market several times with smaller SL?

  • Poll

  • 1 trade with big SL OR reenter market several times with smaller SL?
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  • #1
  • First Post: Nov 8, 2011 10:40pm Nov 8, 2011 10:40pm
Let's say that we have a breakout system on daily or higher time frame. This system requre big SL since the breakout box is quite big, maybe 200 pip or more.
So, which one is better way to enter market?

1. Put buy order with SL on the other side of the box, so the SL is big.
2. Find intraday S/R and use it as SL. If price hit SL, we define new breakout box, find new intraday S/R and put another buy order.

In my opinion, for option 1.
Good:
1. Need fewer time to monitor market since we only trade once.
2. Get less probability to get stopped when market in sideway / choppy condition.
Bad:
1. SL is big, we pay more in pips if we are wrong
2. Have worse R:R than option 2

Option 2.
Good:
1. SL is smaller. If market hit our buy order, then hit our SL and never back to our direction, we will only suffer much smaller loss in pip than Option 1.
2. Have better R:R than option 1

Bad
1. Need more time to monitor market because we plan to reenter market if our previous trade is loss.
2. Might get stopped cause market in sideway/ or choppy more often.
3. Might failed to reenter market if market hit our SL and then move quickly to the direction of our trade. If this happened we might lose 1 or 2 trades with small SL and miss the winning trade when market finally move to our direction and never back while Option 1 will give no loss trade and have the winning trade.

So, in your opinion, which one will you suggest?
  • #2
  • Nov 9, 2011 4:19am Nov 9, 2011 4:19am
Quoting Special One
Let's say that we have a breakout system on daily or higher time frame. This system requre big SL since the breakout box is quite big, maybe 200 pip or more.
So, which one is better way to enter market?

1. Put buy order with SL on the other side of the box, so the SL is big.
2. Find intraday S/R and use it as SL. If price hit SL, we define new breakout box, find new intraday S/R and put another buy order.

In my opinion, for option 1.
Good:
1. Need fewer time to monitor market since we only trade once.
2. Get less probability to get stopped when...

I can trade either way profitable...

It comes down to what you think work... Because you need to believe in something when you hit the wall.... keep pushing through and you will be profitable...

mentally for me I prefer a sober risk reward, not greedy nor lots of risk...
look at the liquidity and think quality...
KISS
  • #3
  • Feb 25, 2012 5:20pm Feb 25, 2012 5:20pm
Has anyone ever seen the math done anywhere on when it is actually better to get out and re-enter at the lower price when a trade has turn against you?

I see A LOT of subjective opinions (i.e. ... I use a 5% stop, no stop or just whatever my gut tells me), but I haven't ever really seen the math done to determine the actual optimal cut off where you should just get out.

If someone has come across something like this please let me know I would love to read more about it.
  • #4
  • Feb 25, 2012 6:22pm Feb 25, 2012 6:22pm
Personally i like to put a stop loss on the reverse pivot of the previous bar.

In my case i would enter after previous bar resistance is broken going long.And place my stop below the support of that bar. usually it will be around 100 to 150 pip stop and my profit target would be an equal R:R. I like to risk 2%to 3% per trade as the trade may last longer.

I do this all the time I call it my bar break strategy. Pretty simple style of trading.

The cool thing is when your in the money you can go for a lot more then your original risk or you can be humble and stick to the plan either way it's a free trade being you can protect with in the money or close to even stop loss.

Iv'e done this for the past year and half. Every night i look for new limit orders to set.

I used to set tighter stops and realized that a lot of breakouts pullback and stop you out simply to provide more liquidity to the upside. I hate to provide liquidity. Lol!

Any how this works for me.
My trades are 100% profitable 65% of the time!
  • #5
  • Feb 25, 2012 10:09pm Feb 25, 2012 10:09pm
reenter several times with smaller stops? this sounds like top n bottom picking(in this reference), which is never a good idea....
  • #6
  • Edited Feb 26, 2012 12:01am Feb 25, 2012 11:51pm | Edited Feb 26, 2012 12:01am
Quoting Aston01
Has anyone ever seen the math done anywhere on when it is actually better to get out and re-enter at the lower price when a trade has turn against you?

I see A LOT of subjective opinions (i.e. ... I use a 5% stop, no stop or just whatever my gut tells me), but I haven't ever really seen the math done to determine the actual optimal cut off where you should just get out.

If someone has come across something like this please let me know I would love to read more about it.

You know after thinking about it a bit, what if you used the following info to come up with a number.

 

  1. Exit Slippage (Could be pulled from live Bid/Ask numbers)
  2. Reentry Slippage
  3. Commissions Both Ways
  4. Even possibly a buffer amount or % to account for partial fills or a number of other things.



Once you have past that amount you have blow right past the costs associated with getting out and getting back in. Maybe you still decide to use something else for your stop, but the calculation might make for an interesting indicator to keep an eye on for perspective.

  • #7
  • Feb 26, 2012 2:54am Feb 26, 2012 2:54am
Quoting Special One
Let's say that we have a breakout system on daily or higher time frame. This system requre big SL since the breakout box is quite big, maybe 200 pip or more.
So, which one is better way to enter market?

1. Put buy order with SL on the other side of the box, so the SL is big.
2. Find intraday S/R and use it as SL. If price hit SL, we define new breakout box, find new intraday S/R and put another buy order.

In my opinion, for option 1.
Good:
1. Need fewer time to monitor market since we only trade once.
2. Get less probability to get stopped when...
If you have to choose maybe take the one that suits better to your personality and feels more comfortable to trade. If you like it fast, take several smaller and if slow, then just one but a big one may be enough for you..... Or if you usually like it slow, but sometimes fast, then just do it fast occasionally. Just realised that it may be a bit similar than some other stuff happening in the bedroom....
  • #8
  • Last Post: Feb 26, 2012 3:57am Feb 26, 2012 3:57am
How bout go with what makes sense.
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