Simple system needs refinment

[wannnabeatrader]

Thanks for clicking! I'm a new trader, as you can probably guess from my handle. I'm not looking for any FOREX holy grail or anything..I know that not every trade is going to be profitable..and hell...most probably aren't. I just have questions for you senior members if you can spare a few minutes to enlighten me. The set up that I have decided to proceed with (on a demo account at first) is this:

1 hour chart, with Heinkin Ashi and alligator. Alligator acting as the filter. I figure that's so simple that I don't need to post a picture but if I do just let me know. I am going to be using EUR/USD exclusively as I prescribe to the theory that traders who "get to know" one specific currency pair do better over time.

My question is: I see all kinds of options for Stop Loss and Take profit points but don't have a clue which one is profitable. At first I was thinking of using a stop loss of 20 and a take profit of 25 but that seems way too narrow based on this week's volatility. Can anyone help me? I'm pretty sure that this simple set up can be profitable I just need to know optimal SL and TP parameters.

I considered using the heinkin ashi as my stop loss..but I don't know if that's viable or not. What i mean is...if the alligator is in buy mode and a buy signal comes up on the HA then I buy..and I close if the HA signal reverts to sell by the end of the hour. The problem with that is that I could potentially lose 100 pips that way...but I could also make 100 pips..so im sooooo confused.

Can someone help me? Let's get a good discussion started here...I'm sure someone else is in the same boat.

[BlueWhale]

Welcome wannabe

Let me ask you a few questions, that will help get the ball rolling. Now, every person here is going to have a different answer and that is ok. What it all boils down to is defining your goals and setting a plan in action to acquire those goals.

1) What time frame do you live in currently?

If you live say in the Eastern Time zone and you work at a day job, then EUR/USD would not be a pair you want to look at trading. You want something you can trade in the evening say one of the Yen pairs. Their market will be open and they are trading in EST.

2) Are you looking to grow your account for retirement or rainy day fund, OR is this going to be your full time profession?

In the event it is for retirement or rain day fund, I suggest you look at make 25 pips a night increasing your lots each day, this creates a compounding effect, ( i use this even though I trade full time). Or you can go for every pip you can make, ( I don't recommend this because it invokes the emotions into trading that will kill you)

So tell us more about your goals, Along the way make sure you start studying 2 things specifically, 1) Support and resistance and 2) Money management, this is a difficult area because people are going to say just don't use more than 2% but it goes deeper than that.

I hope this gives you some food for thought.