When you back testing, take 3,000 trades or more if you have the data, and on winning trades, find the MAE Maximum Adverse Excursion, how much these trades went against your position, I usually drop off the extreme 5-10% and then you have a better way to know what stops should be. I usually go one more test of finding out how much time it took to become favorable so I can put in a plus one tick locked in breakeven stop, I found for myself, that if a trade takes too long, it more likely become a losing trade, whereas if I know a certain time, I can get out with a tick to pay fees.
Handle123 good post, Is there any backtesting system to calculate MAE and time in trade, or is this all done manual per trade during backtesting? Thanks