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Securing your trades by moving s/l to break even

  • #1
  • First Post: Sep 22, 2015 4:24am Sep 22, 2015 4:24am
Hello.
Do you tend to secure your trades by moving Stop loss to break even after the trade moves in your favor a little?
So many times, the trades don't have the steam to reach my goal and reverse on me in the middle of the way, Securing them by moving SL to a few pips over entry helped me to avoid a good amount of losses.
On the other hand, price might retrace slightly and hit your sl before moving towards your goal again, however I believe you can't blow your account if you don't lose

What methods do you use to determine when and where to move your stop loss to?
  • #2
  • Sep 22, 2015 7:23am Sep 22, 2015 7:23am
I'll give you the drum.

I can't take anyone who says they move their stop loss to BE seriously.

If you don't really want to commit to a position, just don't bother entering in the first place. Do you know what I'm saying?

I'd say 82.3% of my positions go negative after being positive. and of those 82.3%, I'd say 85.3% come good again and go on to be champions.

-you need some God damn confidence in this game, you can't be a sissy second guessing yourself all the time.

That being said... I'm sure moving stops to BE might actually work for some people who trade with lots of tiny losses/BEs where the few and far between wins make up for the fact. - Tudor Jones comes to mind.. & he is no doubt a legend.

so... what ever works. for you. individually..
  • #3
  • Sep 22, 2015 7:41am Sep 22, 2015 7:41am
Quoting Z12
Hello. Do you tend to secure your trades by moving Stop loss to break even after the trade moves in your favor a little? So many times, the trades don't have the steam to reach my goal and reverse on me in the middle of the way, Securing them by moving SL to a few pips over entry helped me to avoid a good amount of losses. On the other hand, price might retrace slightly and hit your sl before moving towards your goal again, however I believe you can't blow your account if you don't lose What methods do you use to determine when and where to move...
As your very question implies, in some cases it might make sense to take little profit, but in another to have stop loss. :nerd:
  • #4
  • Sep 22, 2015 9:30am Sep 22, 2015 9:30am
I do that if a trade goes considerably my way but signals that it might have changed direction somewhere in the middle; at that point, better break even than lose money on an earlier winning trade.
  • #5
  • Sep 22, 2015 11:52am Sep 22, 2015 11:52am
Quoting Z12
Do you tend to secure your trades by moving Stop loss to break even after the trade moves in your favor a little?

Not "a little". I do under some, set parameters related to volatility.

I tend (with most of my systems, which are broadly similar) to trade 3 lots, closing the first two quite quickly to cover the cost of the third and lock in a small profit, and then I try to let the third lot run (if it will), sometimes moving its stop-loss to breakeven, depending on the volitility.


Quoting Z12
So many times, the trades don't have the steam to reach my goal and reverse on me in the middle of the way, Securing them by moving SL to a few pips over entry helped me to avoid a good amount of losses.

Sometimes it can.

But it can also retrace just far enough to hit that moved SL before continuing rapidly on its way in "your" direction, so this can cause losses (in "opportunity-cost" terms) as well as saving losses.

What matters is to have a fixed way of doing this, to make it as objective as you can, and to have statistical proof that over a series of (say) 200-300 trades of that type, you're saving/making money collectively by moving the SL to breakeven at a specified point.

Individual trade outcomes don't really matter: what matters is whether over 200-300 of the same type of trade, on the same instrument, with the same volatility, you're making an overall profit by adjusting the SL compared with the outcomes of the same trades if you don't move it.

It's all about statistics and probability and evidence.

The more your decisions are evidence-based, and the less they're subjective, the better your overall results will be. It's not so good "thinking that one way is better, overall, than another": that's just guessing. You have to be able to prove it (to yourself). Preferably before trading it with real money.
  • #6
  • Edited 3:24pm Sep 22, 2015 12:07pm | Edited 3:24pm
Quoting Z12
Securing your trades by moving s/l to break even
I think you would be better with automated trailing stop then. That way, you could lose less than desired or even profit on your losing trades.

P.S. Just my opinion.
  • #7
  • Sep 22, 2015 12:24pm Sep 22, 2015 12:24pm
Quoting BlueKnight
{quote} I think you would be better with automated trailing stop then.

That method has exactly the same problem: sometimes the price will retrace just far enough to take out the trailing-stop (which has sometimes moved to break-even or nearly), before turning into a "big runner in your direction", and you can miss all the profit that way.

No disrespect implied at all but "I think you would be better ..." is just a guess.

What's helpful is specific collective evidence relating to specific instances, as explained above. This is a factual, objective matter. Either a fixed or a moving SL is better, overall, depending on the exact type of trade. You just need to prove which, and know which, before you trade.

It's objective and provable, not really about "what people think".
  • #8
  • Sep 22, 2015 3:24pm Sep 22, 2015 3:24pm
you are looking for a blanket statement to cover all eventualities. not going to happen. Too many variables. leverage, margin, risk, account size, pair traded, volume when trading.
You ask a question that can be answered "yes" and an arguement can be made for both sides. Personal preference is a BE 2/3 of the way to TP. THis generally means that i got the trend right, just did not get the strength and volume right- and that's OK because I get to trade another day.
If you remember nothing else, remember "Preserve your capital" no donaro, no trade.
  • #9
  • Sep 22, 2015 4:56pm Sep 22, 2015 4:56pm
Quoting BubaYaga
I'll give you the drum. I can't take anyone who says they move their stop loss to BE seriously. If you don't really want to commit to a position, just don't bother entering in the first place. Do you know what I'm saying? I'd say 82.3% of my positions go negative after being positive. and of those 82.3%, I'd say 85.3% come good again and go on to be champions. -you need some God damn confidence in this game, you can't be a sissy second guessing yourself all the time. That being said... I'm sure moving stops to BE might actually work for some people...
I agree.

If you believe in your trade, you've got to show it.

If your trading conditions are met, there is no need to cut your trade's potential. Of course, it's another story when you think the condition are not as good as when you enter the trade.

Don't forget that the volatility is one of the main factor of profit.

Sorry to be harsh, but let's say it: If you can't handle the volatility, reduce your position's size, or don't trade, or blame your parents for having raised a wimp

BTW, there are tons of traders that move their SL to BE and are profitable. But I believe they are not the majority of the profitable traders.
  • #10
  • Sep 22, 2015 6:57pm Sep 22, 2015 6:57pm
Quoting Z12
Hello. Do you tend to secure your trades by moving Stop loss to break even after the trade moves in your favor a little? So many times, the trades don't have the steam to reach my goal and reverse on me in the middle of the way, Securing them by moving SL to a few pips over entry helped me to avoid a good amount of losses. On the other hand, price might retrace slightly and hit your sl before moving towards your goal again, however I believe you can't blow your account if you don't lose What methods do you use to determine when and where to move...
Hi mate, what time frames are you trading?
For me, I trade the 4H and 1H charts so once a trade is in profit by +30 pips I'll put my SL up to the +10 pips line and walk away.
If I'm having a bad week and I'm behind target once I'm up +30 pips I'll close and put that in my pocket then move onto the next trade.

Give your trades some space. Don't be like this kid bro
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  • #11
  • Sep 22, 2015 7:30pm Sep 22, 2015 7:30pm
The name of the game is exits.

Look at what causes price to reverse against you and be pro-active about exiting, not waiting for the market to come hit your insignificant stop.

And moving your stop to b/e is not 'managing risk', no matter how many so-called gurus will mention it. There are many other factors that come into play for playing around with risk. It is a bad habit you should drop early on.
  • #12
  • Sep 23, 2015 12:16am Sep 23, 2015 12:16am
Umm, I probably should've mentioned that, of course for a scalper with 10pip targets it won't make sense to move s/l to break even. Maybe using the word "little" in op implied something I didn't meant to imply..
As a swing trader with 100pip targets, I call 20 pip movements a mere "noise", but when the market reverses after moving 70pip to your direction, then there is a good chance that something is wrong.
Also, people seem to forget that the number 1 & 2 reasons that traders lose is over leveraging and insisting to hold a losing trade, which is exactly the opposite of being a 'wimp' or a 'sissy'. We are not here to prove our manliness, but to make profit.

--
I started doing this just recently in my live account without backtesting, So far out of the 4 trades that hit my b/e stop loss, 3 made it to the target after they hit my stop loss, so I was probably better off not moving my stops, but am I sad that I played it safe? No, What really makes me mad is that one trade that I insisted to hold and could avoid losing if I had moved my stop to b/e. perhaps I should be more accepting of losses..
I made this thread to hear about others' experience
  • #13
  • Last Post: Sep 23, 2015 1:01am Sep 23, 2015 1:01am
hello
I always trade with BE, entering my trade based on single candlestick, and then when it close, I move my stop to BE
I get hit 20%, i often close my profits manually.
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