Depends on your trading strategy, holding period and price volatility. For example if your strategy was identifying trends you wouldn't use a profit target. If it was identifying ranges then your profit target would be at the top of a range. Longer holding period means wider stops. Higher vol means wider stops. GAT
imagine you are trading crude oil (CL) on 5 minute timeframe . the average length of a candlestick in this timeframe is about 20 points /ticks which means your stop loss is about 200 $ . average volatility after a setup (price movement) of crude oil in US session is about 70 points which is 700 $ .
so with above calculation , you can use a target of at least 3 times of your stop loss .try to calculate average stop loss & average movements of a specific instrument & then compute optimal stop loss & targets
you can also add "break even" scenario into stop loss & target .for example if price moved twice of stop loss length then move stop loss to entry point and break even your trade .
Im trying to place a trade with a stop loss a bit below current price and it says invalid stop loss wtf is this? are there specific rules about stop loss?
You're not clear. So I have to assume a bunch of stuff. Place the order to buy the instrument. After purchase, place a new stop-loss order to sell.
You're maybe using a the wrong order type. Use buy / sell limit if price Above / Below. Use buy / sell stop if price Below / Above.