General discussion – how do you set your SL?

• 01/26/2022 at 5:39 PM #186667
  Khaled

  Hello everyone,

  I wonder how you generally decide on the level of your SL. I’m fully aware that this depends on the TF or let’s say on the holding period. If you trade on Daily/Weekly chart you won’t have the same SL as for 15min/5min TF.

  I have seen three school of thoughts so far (may be there are more):

  1. Tight SL (say max 50pts on the Dow, approx. 0.15%). It’s either the trade goes immediately in your direction or your SL get hit very quickly. Repeat again and again until you hit the right big move. Usually, limited individual losses, but low WinRate.
  2. Large SL (eg 2%, equivalent of nearly 700pts on the Dow!). You give some room to the market to move sideways before choosing the direction. Doing so, you increase you WinRate but you miss the chance to exit when the trade is not immediately confirmed and take another trade at a lower price if you’re Long (opposite for Short).
  3. No SL. There are folks I know personally who trade only manually and who are profitable who don’t place any SL. As far as the trade has not been invalidated, they stay. One of their invalidation scenario is get out if breakdown of previous H1 candle low (opposite for Short).

  What worked best for you?

  Any other ideas of SL?

  Thanks

  

  Khaled

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  02/15/2022 at 6:16 PM #188317
  robertogozzi

  Some use ATR, or SuperTrend.

  There’s no safe rule. It depends on your attitude towards losses and is greatly tied to the timeframe used. 10 pips can be enough on a 1-minute TF, but won’t earn you much money on a Daily TF.

   

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  robertogozzi

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  02/15/2022 at 6:40 PM #188319
  phoentzs

  I have systems that are very short on the market. Price action in M1 or M5, only a few minutes in the market. You could call it a scalper. These get out immediately when they fall below a certain level. For example, Close<Close(10) in the SP500 is about 10-15 points on average.

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  phoentzs

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  02/18/2022 at 9:25 AM #188443
  Nicolas

  Price level that invalidate your order trigger scenario. Most of the time last lower low or higher high (depending on strategy obviously).

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  Nicolas

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