When your stop-loss works against you...
Feb 22, 2015 at 04:01
415 Views
2 Replies
forex_trader_43716
Member Since Aug 06, 2011
345 posts
Feb 22, 2015 at 04:01
If it bugs you when your stop-loss seems to be working against you at times, like giving too much unrealised profit back at exit, or triggering too frequently, resulting in a string of small, but annoying losing trades, this might be helpful.
I deal with this issue by setting a Buy Entry Stop at the previous low less ATR, and Sell Entry Stop at previous high plus ATR. This allows room for a new trade to settle-in without risking too much.
My Buy Trailing Stop is moved to the previous low IF the ask price is more than the entry price plus ATR, and the Sell Trailing Stop is moved to the previous high IF the bid price is less than the entry price less ATR. This means that my stop lags behind sudden trend breakouts and lets them run, but tightens-up at price consolidation areas to maximise profit held should price action reverse and the stop is triggered.
Works for us! 😎
I deal with this issue by setting a Buy Entry Stop at the previous low less ATR, and Sell Entry Stop at previous high plus ATR. This allows room for a new trade to settle-in without risking too much.
My Buy Trailing Stop is moved to the previous low IF the ask price is more than the entry price plus ATR, and the Sell Trailing Stop is moved to the previous high IF the bid price is less than the entry price less ATR. This means that my stop lags behind sudden trend breakouts and lets them run, but tightens-up at price consolidation areas to maximise profit held should price action reverse and the stop is triggered.
Works for us! 😎
Member Since Oct 11, 2013
775 posts
Feb 23, 2015 at 12:40
Another good method to use when placing your stoploss is to place it outside volatility, and volatility could be measure using the ATR, good work.
forex_trader_43716
Member Since Aug 06, 2011
345 posts
Feb 23, 2015 at 20:49
(edited Feb 23, 2015 at 20:49)
alexforex007 posted:
Another good method to use when placing your stoploss is to place it outside volatility, and volatility could be measure using the ATR, good work.
Agree! Any measure used that will keep you outside volatility will help reduce premature exits. As volatility dies down, prices tend to consolidate, and so the stop-loss automatically moves closer to the price action and not give back too much if triggered. 😎
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