There are some systems that has a 30 or 50 pips s/l. The reason is that it expects profits of 100 or 200 pips. Very nice, but how can you know you will get such big profits?
If that works for girlpower, great. If spikes work within my chart paramenters, I ignore em completely. If not, they take me out, so we probably have similar results, different reasons. Sometimes it takes too long to get news on an event though. A few minutes can be a long time. The pound spiked last night in Eurpoe, but worked great with my charts, so I went with it (still in it, but damn close to resis on my 60 min channel). Send me your email and I'll send you a screen shot of what I'm referring to. I don't know how to post a screen shot here, or I would.
My approach is mostly to analyse and project market directions and the potential probabilities based on historical cases, whether right or wrong. When sometimes, not always, the market direction has quite clearly developed, about 40 pips would be OK, providing the marketmakers don't run your stops out (usually they would).
Hi Jay, Click at my profile, where you can send a email to me. But I suppose our friends also wants to see your screen shot?
If you analyse the markets enough time and costs (you understand what that mean), your accumulated knowledge and experience would tell you a rough estimation. But no one knows for sure, only the market knows how much it gives us. Many say: Entry is the easiest part, worth only 20% weighting, of a trade.
If that's the right thing to do (letting your loss ride), we have to write some new rules, I suppose?