for you guys swingtrading for a day to a month.. what size of initial stop losses do you use? what is regular size noise ? how far do you stay behind the bid/ask to prevent being stopped out but still reducing risk while staying in the trend?
Setting stops is both arbitrary and artful. Presuming you want the "best" chance of your trade working out... the type of trade you're playing will influence the determination of stop. (That is, are you trying to fade a presumed noise counter, quickly chasing a gap on news, or giving the benefit of the doubt to trend?) Unless you are looking for a dissertation, you probably need to be more specific with your question.
i could use a disseration or two.. however im thinking about more of a trend following approach such as ma crosses on daily charts (forex)
Oops... you caught me off guard. I don't ever think of trading on MA crosses, as they are way late to the party. Somebody who uses them better answer this one.
Hi. I wouldnt suggest stops less than40-50 pips. It depends on volantility of instrument. I use atops 50-100 pips, rarely more than 100. But puting smaller pips is not reasonable in such agressive market. You never know where exactly the bottom/top will be even if getting in near those lows/highs, so thats 10-25 pips at least even if you're near top/bottom. Plus the noise to occure near those top/bottom, plus couple pips "streched" by your broker...so at least 40-50 I say... Good Trades.
The placement and size of the initial stop loss is dependent upon the basis of the trade... why it was considered in the first place. For instance, using support and resistance (S/R) technique for entry, the initial stop is placed beyond the S/R. This holds true for the trailing stop also. Dynamic S/R technique adjusts with market movement so stops adjust accordingly. How far to place stops beyond the S/R is dependent upon the market being traded... each exhibits different noise characteristics. This approach gives a trader a degree of control, in that both initial risk and ongoing trade risk can be measured and compared to potential target. Professor Prime-Line
This question needs better definition to be answered accurately. 35 pips = EUR/JPY/GBP 45 pips = CHF 10 minute chart. London session