I remember reading a post from the TheMightyOne he is/was trading from higher timeframe and gave a calculation for the ratio. You could come up with your own calculation?
Plus this what i would do and TRO said it many a time if you open position and your in profit after a period time (you must define how long that time period is) tighten up your stop loss.
Think about, if you entered a position, to go long, with a huge stoploss say 50 pips and after hour your up 25 pips. Were would price have to go to make you fearful of trade turning against you?
answer: The lower bottom extreme of that hourly candle. So why not tighten your stop loss up to couple pips below the candle.
I personally enter daily trades with 20 pip stoploss and soon as the hour candle closes im reducing my risk on average to 8 pips.
The way i see it is, if i picked my trade thats with flow of market then all i have to worry about is the wick of the next candle. That leads to next question.
Whats the average length of a wick in an hourly candle? between 10-19pips on eurusd as example. So if i use 20 pip stoploss i know im relatively safe. Its all about managing your trade and reducing your risk.
I know some guys here hedge positions but doesnt suit me but might something else to look into.
These are concepts you need to think about.
wkestler wrote:Hi TRO i have trading like a rat on the D1 frame but my question is which is a good SL to use. 10 pips or more? so far i`ve been using much more than 10 and profit is very good my i still have that concern.
Thanks for your advice