Ahh, you might of hit the head on the nail there, yes, just with my strat that i developed or should say am using i do have a fixed amount of pips for a s/l and target, 20 stop and 40 target on major pairs, I just thought not to be to greedy and just stick to the strategy, but i suppose some pairs are slightly more volatile than others or all can be at certain times, maybe its time to set s/l at supp and res levels.
Yes, using a # of pips as a stop/profit is not really accounting for what the market is doing - I think you need to take these from the charts rather than a pre determined figure.
Another possible solution (and this really depends on how you pick your trades) may be just to be willing to miss more trades and look for better spots to get in.
Very often the market will look like it's going to reverse and then hammer those who got in early, only to then make the reversal move shortly after (few candles after)
I just grabbed the first chart that was open when I opened MT4 and took some examples on if you were looking to trade on candles that looked like they may be reversals - whether or not these were good reversal candles signals or not is subjective and obviously everything is easy in hindsight, but hopefully it illustrates how this happens and you can do some back testing yourself if you think it may be useful.
From left to right;
Engulfing candle, price falls and buyers get hammered, then the actual move happens.
Doji style candle, sellers get hammered and then the move happens.
Engulfing candle - buyers get hammered, second time buyers get hammered as well, but it did try to do it, weight of the market was just too much.
On the blue circle area, you are missing that trade if you wait for the buyers to get hammered.
Whether or not the shadow on this candle was big enough to signify a possible reversal is very debatable, but if people took it, they got hammered, then the move happened.
Hammer, sellers get hammered, then the move maybe happens. I have not checked the smaller charts but I would think that the move was up and then rejected and went down to make a new low.
On this particular chart, you would have only missed one move, but I am not saying this is representative, just so happened this chart was a very good example. (and again, this is with hindsight, some of these trades you would not have known that the second move was about to happen, was no real signals, except breakouts)
I think being willing to miss more trades and look for this happening would be better than widening your stop loss and reducing your risk/reward ratio - trading 1:1 is very difficult to be profitable over the years, if you can, you are very good at picking when to trade.
