What is the safest (but most profitable) way to set a stop loss?

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As from the title, I mean which method has the best ratio safety/profitability for you (support resistance based, atr based, range based, time based etc etc.)

Share your opinion...

 
Risk depends on your initial stop loss, lot size, and the value of the pair.
  1. You place the stop where it needs to be - where the reason for the trade is no longer valid. E.g. trading a support bounce the stop goes below the support.
  2. Account Balance * percent/100 = RISK = OrderLots * (|OrderOpenPrice - OrderStopLoss| * DeltaPerLot + CommissionPerLot) (Note OOP-OSL includes the SPREAD, and DeltaPerLot is usually around $10/pip but it takes account of the exchange rates of the pair vs. your account currency.)
  3. Do NOT use TickValue by itself - DeltaPerLot and verify that MODE_TICKVALUE is returning a value in your deposit currency, as promised by the documentation, or whether it is returning a value in the instrument's base currency.
              MODE_TICKVALUE is not reliable on non-fx instruments with many brokers.
  4. You must normalize lots properly and check against min and max.
  5. You must also check FreeMargin to avoid stop out
Most pairs are worth about $10 per PIP. A $5 risk with a (very small) 5 PIP SL is $5/$10/5=0.1 Lots maximum.
 

These are calculations.

And calculations are not opinions.

Opinions are open to interpretation.

Mathematics does not have that property.

It is an exact science.

You are still barking up the wrong tree by using profitable and loss in one line.

The words are self explanatory a stop loss is there to prevent you from more loss.

If that is also more profit depends on other things.

 
I am just going to comment here so that I can follow this thread. IT is an interesting question by the way, thanks @Jox90 for asking
 
you  can add it to your favorites then you will receive a notification when there is an update.
 
There is no best way to calculate a stoploss, there's many. You have to select & choose which one to use according to the whole strategy.
 

My stop loss is alwais tecnichal, it mean based on support and resistance and areas of prices.

I use the fixed percentage of equity as money management.

It means that my risk in term of money is growing with my equity

I use ATR sometimes for determine trailing stop.

This worked till now very well for me.

I dont use ATR for determine stop loss, but i use to watch it and put it in my trading diary at the moment only for get statistics

If somebody use ATR for determine stop loss, please share your experience and tell how.
I know somebody use the current points, or moltiplicate it for 0.5 or 2 , or 3.

Id like as well to know something more about other experiences and statistically

Ciao)

Alberto L.

 
Alberto Lucadello:

My stop loss is alwais tecnichal, it mean based on support and resistance and areas of prices.

I use the fixed percentage of equity as money management.

It means that my risk in term of money is growing with my equity

I use ATR sometimes for determine trailing stop.

This worked till now very well for me.

I dont use ATR for determine stop loss, but i use to watch it and put it in my trading diary at the moment only for get statistics

If somebody use ATR for determine stop loss, please share your experience and tell how.
I know somebody use the current points, or moltiplicate it for 0.5 or 2 , or 3.

Id like as well to know something more about other experiences and statistically

Ciao)

Alberto L.


Ciao Alberto, I'm italian too! :-) An ATR stop is the best choice for trend trading because it reduces loss a lot if you are "sure" that the price will not turn back consistently. I use sup/res stop too, that has a bigger "margin space" but sometimes it means a big loss sometimes a little loss depending on where is the sup/res, and this is what I don't like...safety is good but profitability/less loss is not so convenient, that's why I'm searching for a better method...

 
Jox90:


Ciao Alberto, I'm italian too! :-) An ATR stop is the best choice for trend trading because it reduces loss a lot if you are "sure" that the price will not turn back consistently. I use sup/res stop too, that has a bigger "margin space" but sometimes it means a big loss sometimes a little loss depending on where is the sup/res, and this is what I don't like...safety is good but profitability/less loss is not so convenient, that's why I'm searching for a better method...

Ciao! Un Italiano !! Grande...vivo in Russia pero' ...al freddo!!!

Yes, interesting point of you, sometimes sup and res have rather big range, and that can influent the profictability rather heavily.

Even more for who like me use a position sizing relationated on a percentage of equity, it mean bigger is the stop loss, less is the size, and less is the profict if market follow your way.

 
I think Stop Loss is following your trading method, You decide to Open Position because you see your method tell you to do so, and you will stop your position if your trading method tells you that the Price Action go in other way (opposite direction) of your position you had opened based on the method.. I hope you get the point..
 
Jox90:

As from the title, I mean which method has the best ratio safety/profitability for you (support resistance based, atr based, range based, time based etc etc.)

Share your opinion...


there is no best way to set your stop loss but you can know what you want to put on each trade I mean how much you are willing to lose in each trade I think that's the best way for you to have a safe stop loss otherwise any range support or whatever we still drown your account if you are not prepared to take what that range/support has to give
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