What is the Best Stop Loss Method for GBPUSD?

Traders using various stop lose methods to prevent huge loses if the trade goes against desired direction. Here is few methods

 

1. Support and Resistance
2. Daily Range (Average True Range) 100-120 pips
3. Pivots
4. Price action candle tops and bottoms
5. Order flow bids and offers
6. Fibonacci
7. Elliott waves
8. Fixes stop loses
9. Trailing stop loses
10. Bollinger Band

I'm a new trader and still learning Forex and doing Forex trades with mini lots on GBPUSD pair, I like to hear ideas of professional traders about what is the best method for set stop loses.

1)If you are using technical analysis to trade then your stop goes where the trade is no more a trade according to your method.
2) Place it where your money management allows you. Only you know how much money you are prepared to lose on any given trade.
Brokers ,Banks.Hedge funds and the like knows where retail traders stop losses are......
This market is cruel and you are swimming with BIG sharks. Nothing is guranteed here!
Be careful it is true that "others" are out to get you. No stoploss is safe from anyone.
The only sure thing about a stoploss is that it will keep you longer in the game.....

Stoploss is related to some factors.
The first is the target of the trade, if you trade intraday or long term you cannot use stoploss of a 5 pips target scalper.
So a 5 pips scalping system cannot use Fibonacci levels for example.

Said this it's also obvious that the stoploss should be more little as possible, this means that using your money management you will get more money from the same target (supposing you trade with fractional MM, in other word that you decide to lose a maximum amount of money for every trade).
If you, for example, decide to risk 1% of your balance opening a trade, more little is the stoploss, more big will be the order size and more money you will get when the target will be reached.

The ratio from stoploss and takeprofit is said RR (risk/reward ratio).
This ratio depend how accurate is your entry in market. For "accurate" I mean how wide opposite (you opened a buy but price goes down .. ) fluctuations you get before to reach a target.
If, for example, you want to do 5 pips scalping and you enter in a random time of the day on EURUSD, you could see (if you are lucky) from half to full opposite price movement of High-Low amplitude of EURUSD. How many pips depend from previous days and from how big news will happen in that day.
So, it's obvious a stupid entry, because the RR ratio is about a nonsense, if the trade goes in loss you lose about ten to twenty of what you get if trade goes in gain. So, to recover a loss of a trade with a so demential RR ratio, you should have a strike of ten trades in gain, not very probable.

So, in order to evaluate the entry accuracy of your system and calculate the optimal RR you have only to apply your strategy to past (months or years) in order to check how good is the entry point accuracy and how good (favorable) can be the RR ratio.

To conclude, any different trading system involves different stoploss calculation. Could be based on indicators, on price ation, on time. But all must be tested statistically, or you will trade like to drive a car blinded.

From my point of view, other suggestions are meaningless. Only a statistical approach can make you confident about how can be calculated the SL of a trade ... for YOUR trading system.

A tight stop is the best! Based on price action! Price action is reading the structure of the market.
Tight stops are great... If you choose your area.. well.
I'm watching higher time frames but enter on 5 or 1 minute chart to get as great of entry as possible.
the grey box is london open to london close.
As a trader the only thing you have control over is your risk.. so make it tight at a killer spot!





Stop was 16 pips: 1 pip below lows.. I took 1/2 size on the g/j due to such a large stop for me.


Sorry none of these examples are g/u didn't trade it this week. But I do the same way on g/u.

what I look at is
1. time of day.. Is it early in the session or mid session when its running out of juice <---(pay attention to this one.. its very important)
2. How close is it to major data.. is there time for the move to happen before the next data spike.
3. Always worried about what I have to risk... rather then what I can make. Control your risk
and the rest will follow.

Well it depends in a lot of factors, it´s not going to be the same for a scalper than for a person who does swing trading

Thanks everyone for valuable information

I hate to state specifics because the stop hunters read these kinds of posts, but hmm, good luck to them getting me.

I trade intraday swings, if that helps you understand my reasoning. My entries/exits are typically the same, so a stop loss is merely a preventative tool. I place the first one just beyond the last high/low per my chart design. The market would have to move radically, or I would have to lose access to my charts, for it to be hit. After the market moves in my favor, I will move it to profit, just beyond my entry. If news is coming and I am still in a trade, or if exhaustion is reached and I don't have an exit signal yet, or if I need to walk away from my screen, then I use the last 3 method. I move my stop to trail the lowest/highest point of the previous three candles.

If price is obviously going against me, I do not wait for my stop to be hit. I just exit because my system will show a new trade. I very rarely let a stop loss take me out of the market. Consolidation is an exception. Unlike most traders, I trade live information, so until a few candles have occurred, I do not know the market is in consolidation for sure, but once I do, I protect the downside while I ride it out to see if it will continue in the original direction. Sorry, that might be too advanced.

Most traders use the dead market and make support/resistance lines from yesterday, last week, last month, etc. I trade whatever happens as it happens. So for me, stop losses are not very important. They are more for some catastrophic retraces (spikes) than for taking profit.

I agree with you, most of time market makers hunt our visible stops using news time volatility, spikes and spreads. We can use some Script or EA for hide stop loss for our trades. But it only can reduce some % risk of SL hunting.

If anyone thinks I would post publicly how I implement my stop-loss so the broker or anyone can hunt it, they are very wrong. And especially for the cable, because the pair is SO volatile, it's VERY difficult to trade with a SL. You will constantly get taken out as soon as you were in only to see the price rebound afterwards and move to profit according to your original position. So to trade the cable, you either 1) trade with no SL or 2) trade in small positions and long term.

Good luck on your research though, Suneth2!

I found a good article about SL placing, I'm sharing this here

http://www.tradeciety.com/6-ways-to-...pros-and-cons/