Generally, there's an inverse relationship between win rate/stop size, i.e., small losses = lower winrate and vice versa. Tight stops require relatively large winners in order to offset all the small losses (which do add up). Larger stops should increase your win rate, but once in a while (or often depending on your skill) those large stops will be hit, too. And you may very well take a large stop which eats into a big bulk of your profits (and then some). Another option is to scale into trades and not go all in at once. This gives you a bit more leeway. In the end, I think price action or your trade hypothesis/signal should guide your stop placement. Simple example: You bought (or want to buy) near a swing low anticipating an upmove. If this swing low is breached to the down side, you were wrong. So, depending on where you entered, you should have your stop below that swing low. If you enter in the middle of nowhere, you're more exposed and would require a fairly large stop just to stay in the trade inside all the 'noise'. Also, if you entered in the middle of nowhere, the profit potential is smaller, too. It may be then that you decide to not take the trade because your stop would be too wide according to your risk criteria. It's little use to simply use a small stop for the sake of it if the chances are high it will get hit. Personally, let's just say that in the past I've gotten stopped out of a great many moves - only to watch price go in my anticipated direction. So, I've been more successful using wider stops. However, as a result I've taken some larger losses, too. The best answer is probably what @virtusa alludes to, i.e., improve your entries and create a system where you can consistently use smaller stops. Add also the important ability to be able to skip a poor trade and wait for the next good opportunity.
i do not use stop on single position. I monitor whole portfolio, and use stop loss on whole portfolio. My model is based on portfolio trading instead of winning on a single position. 70% of held positions could be losing but the portfolio is winning. So I watch portfolio curve constantly. If I need something to make the portfolio curve optimized, I add or reduce some positions, but that is not related to stops
Since he is on ES. Try 2-3 ticks below the last 5 min bar. But your trade strategy would have to fit that type of loss. Some of those 5 min bars are pretty big so you would be in trades for 10s of minutes and pretty big or frequent wins. Also beware the bots. The "flush" occurs on a semi-regular basis after consolidation periods. In addition trying to fit a strategy into a loss criteria, is a bit backwards. Ditto for a win criteria. it is a balance of both. All that being said, ES moves in small waves. Larger players move 100's contracts and it overwhelms the order book enough to move the price. (Also it can move under less pressure but that is another situation). One thing to consider is if you take a position and a wave move against the position, try and exit on any rebound. That should result is a smaller loss. Of course knowing what constitutes a wave against the position, versus noise, versus a flush, versus a range test, versus other situations, is where the skill based on experience comes in. If you ever go fishing, it takes a lot of skill to know the bites of big versus small fish and how to play it. A lot is context. And landing a fish is another skill entirely. Importantly, it depends upon the context of the trade. Context of the overall market, Context of the current movements (trend, consolidation), Context of the time of day (opening, closing, lunch hour), Context of the volatility, Context of the players involved. There are more. To ignore the context will result in a lot of noise in the tests. Friday 10/1/21 was a good example of large and medium players overwhelming the day traders. Large moves and large ranges. Short term MAs and price action was very different than other days. But at a few times during the day, there were "normal" and you could see the price action be "normal" relative to the short term MA's. Having a static SL or TS would not have worked out that well in both types of contexts.
You could try, but there is NO Holy grail on ES besides front running order flow with HFT. And even that is highly competitive. Used to be the 5 min was a great one to work with, but that was 20 years ago. Just create a system, and find a niche where you can be CONSISTENT in the P/L for your system, style and personality.
Well then you gotta reduce risk per trade to lose little and also focus on quality trades. You can work on your edge and improve the strike rate, which then gives lesser losses either way it comes down to they style of trading. Have a larger data sample and then refine it focusing on how to increase the winners
Entrey in any case should be cheap. Take the risk when the trend start to provide sighens of maturety
That can not only give a small loss, but also a big loss if the rebound does not come, or is missed. Especially on days when the ES moves 30,40,50 or even more points in a wave. I would use fix stops, because then at least you are sure to get out and you also know your risk. With a rebound system you never know where it will end, so you don't know your risk. How many times people who had a bad position told:"I will get out at the first rebound". Many of them will get margin calls, or wipe out their complete account, and the lucky ones will suffer only small damage. With fix stops you don't have all these problems.
This is true. Rebound is a relative term. I was referring to something like 2-4 points, and exit with a 1 tick pause or a 3 -4 tick counter movement. One should always have a safety net stop, a max stop that protects the account or just protects the daily trades. The rebound I was referring to was within the safety net (max stop) but it is clear your entry was wrong or your direction was clearly wrong. If an ES position move 5-7 points against, it is pretty clear the trade entry was wrong because either the entry should be there, or the direction is wrong. But all this academic, as the OP does not appear to have a system in place. Mis-applying stops or targets to a system is a recipe for system fail. Trade the action in front of you and react to the changes as necessary.