Anyone use very tight stop losses successfully?

[pro_atro]

I have seen in some threads here that some people use very tight stop losses, perhaps around 10 points or so (or less).

Is anyone here producing good success rates with such tight stop losses?

Obviously it depends very much on how long you hold the trade, if you are a scalper or hold your trades for a few days at a time or longer. I would be particularly interested to hear from any successful people who hold trades for say, at least 4 hours at a time, and hence representing a potentially massive risk:reward ratio.

Of those that are using tight stop losses, do you get stopped out constantly on trades that would then have turned into huge profit? Or perhaps stopped on price spikes? Have you increased your definition of a 'tight stop' to account for the increased volatility of today's markets?

When i use tight stops, it reduces my percentage of winning trades dramatically and the only one who seems to benefit is the spreadbetting company. Maybe i just need to let my winning trades run longer, but the real problem for me is the psychology of having so many losing trades... especially when i see them turn around into what could have been profit moments later.

Opinions and experiences will be much appreciated

[[Deleted]]

A 10 pip stop will ensure that you loose all of your money in a flash.

The stop depends if you're scalping or trying to hang on in a trend, or swing trading.

I am more of a scalper and usually avoid swing trades as I do not like the risk associated with longer-time frame trades.

Suggest you set up some 1-minute charts and study them. You will see that the market trends in channels that can be 5-20+ pips wide most of the time.

Only news, events and banker-speak generate bigger moves.

So, if you do use a stop, it must take into account the width of the channel during that time period.

FYI - my bigggest losses as a rookie was using 100+ pip stops around events such as USA non-farm jobs. They always got hit no matter what. Seems those are the best times for the big boys to pull the bid/ask and sweep up the money.

[RebateFXcom]

A 10 pip stop loss is only suitable for 1min chart scalping. On those charts, if you are wrong, you are wrong!

For the rest of us who are Intraday or Swing, placing stops beyond support/resistance or a comfortable distance from recent highs/lows is a more intelligent way of setting s stop loss.

The idea is that you want to put your stop loss in a place where it is LESS likely to be triggered. A stop loss is the worst case scenario, but you shouldn't be afraid of setting it. Losing 10-20% is better than a margin call.