How too calculating my stop loss ??

[ozhan]

Can anyone advice me on how too calculate my stop loss when placing a trade i belive 10% is low what percentage should i use ??

Many Thanks

Ozhan

 

[shadowninja]

Should be down to how good your entries are (through experience and monitoring of a current position and positions that have failed), how volatile an instrument is and the price level at which you would admit that you are wrong. From that point, you can determine if, with suitable money management, you can afford to trade.

 

[ozhan]

Should be down to how good your entries are (through experience and monitoring of a current position and positions that have failed), how volatile an instrument is and the price level at which you would admit that you are wrong. From that point, you can determine if, with suitable money management, you can afford to trade.

Thanks Shadowninja does make sence !

 

[GammaJammer]

As a very broad rule of thumb though there are many people who say risking 1-2% of your total equity on any given trade is a good starting point.

 

[Black Swan]

Can anyone advice me on how too calculate my stop loss when placing a trade i belive 10% is low what percentage should i use ??

Many Thanks

Ozhan

IMHO If you are going to SB and let's say you open an account with a grand, don't risk any more than 30 quid or 3% per trade (including the cost of the spread and G.stop that should be approx. a 25 pip move against you). If you open with 500 quid adopt the same rule, only use 50p bets instead of £1 per pip. You could be v. cautious and bet perhaps 50p of the £1,000 = 1.5% risk...

Also, if you're starting out I would limit my loss on any given day to a pre - determined amount, I scoffed when someone a while back suggested "a trade a day, then super analyse it to death", perhaps that was a valid point.

 

[AndyDemi]

Hi Ozhan. I recommend using 1% of capital as your stop loss until you become a consistent trader. If you do this it will take 100 losing trades to take you out of the market. When you have proved you can trade well for a period of at least 6 months then you may want to push it to 2% to increase your returns.

I believe in walking before you run and it's what I'd recommend to all newer traders. Greed will eventually destroy your account and your confidence.

Hope this helps

 

[Black Swan]

Hi Ozhan. I recommend using 1% of capital as your stop loss until you become a consistent trader. If you do this it will take 100 losing trades to take you out of the market. When you have proved you can trade well for a period of at least 6 months then you may want to push it to 2% to increase your returns.

I believe in walking before you run and it's what I'd recommend to all newer traders. Greed will eventually destroy your account and your confidence.

Hope this helps

Assuming a £1,000 account are you suggesting ten quid (ten pip) stop loss, including spread and G.Stop?

 

[Dinos]

No hard or fast rule here, all down to the product you are trading, whether you are long term, short term, or day trading. A lot of hard work identifying what level of stop is required, imho not just use a % of capital. EG: if you data says a stop of 17 will suffice to allow a position to build whilst the price movement fluctuates up and down, use that figure as a disaster stop, why set it higher?, you will lose capital very quickly if you do. Its not easy getting, but with lots of hard work and data crunching you should come up with a figure for protecting position that has gone wrong.

 

[disi]

Can anyone advice me on how too calculate my stop loss when placing a trade i belive 10% is low what percentage should i use ??

Many Thanks

Ozhan

I don't get it. You want to risk 10%? That would be insane.

 

[clorets]

Place your stop loss at the point where it would invalidate your trade and then calculate the position size accordingly. Don't risk 10% on a trade, its way too much.

 

[Technically Fundamental]

as above but remember to account for spreads etc