Just so we have our vocabulary straight - by trigger, are you talking an entry point off of S/R or a take profit - I suspect take profit, but i could be misunderstanding
MightyOne wrote:Razorboy asks:
"MO, since I was playing this off of a daily chart, would you recommend using a sl equal to 2.5 times the daily range (like you were suggesting for scalping) or am i just asking for trouble. in the long run. or is this exactly what you mean about only needing to be right 10% of the time if you aim to capture this sort of move on a regular basis - (in other words - let it run longer and don't bail)"
If you only intend to scalp small gains, relative to the size of your SL, then it is to your benefit to use a larger SL.
If you intend on trading for larger moves and are not scalping then you are greatly benefited by smaller stops that give you greater multiples of risk
I'll use Dynamic Fibs S&R as an example:
If I were targeting the larger move then I might use the 10 pip trigger with a 15 pip SL where 10p = 1% (the extra 5p to make sure
that the SL is at or beyond the extreme).
If I were scalping then I might use a 20 pip trigger with a 25 pip stop loss where 20p = 1%
Going even further up the time frames to scalping a daily/weekly chart I might use a 40 pip trigger with a 45 pip SL where 40p = 1%
"THAT'S NOT SCALPING!":
Like every thing else I say it doesn't make a lick of sense until you sleep on it.
If you use 10p as 1% then you should consider a 20 pip gain as a 20 pip gain.
If you use 20p as 1% then you should consider a 20 pip gain as a 10 pip gain.
If you use 40p as 1% then you should consider a 20 pip gain as a 5 pip gain.
I hope this answers your question Razorboy.