RE: When to raise stop loss?

Discussion in 'Risk Management' started by TheoCap, Sep 1, 2007.

  1. TheoCap


    I'd like to get you guys' opinions on at what point one should raise their stop loss after a position has gone in their favor. For example, lets say I'm aiming for a 2.5 to 1 reward ratio, at what level would you recommend raising the stop loss and by what amount (at 1.5? 2? 2.5?).

    Thanks guys.
  2. It depends a lot on how the price moved on that particular day and the pattern it just formed after your entry..
  3. Usually, trailing stops do little to increase the bottom line. I have run many samples and have seen a lot of testing (Futures, TASC, SFO, if they can be believed).

    It is more of a feel good thing. The wider your stops, the more your profits and potential big loss. The narrower your stops, the smaller your profits, but the less change of potential big loss.

    I think more fertile ground might be backtesting your OWN system, and see what different types & sizes of stops might be. Results can vary widely depending on your trading method.

    Also, it should probably vary in size based on recent volatility. Some will also tell you to base it on nearby support/resistance. But this can be a subjective thing.
  4. ee.fxfx


    It is not always favorable to raise stop losses after the price went in your has happened with me a couple of times..i use to raise my stop loss and then straight away the price would touch my stop loss and then shoot back up again....but that also depends if the market is very volatile....
  5. Johno


    No idea of a %, as the market I'm in dictates when to get out.