[rod30]

i ve got a problem when i go long or short i start to earn money but i dont know when i must to exit so my profit became lost i use 1 minute chart with Exponetial moving average i buy and sell on breackout does any one knows the formula where to put stop loss and the trailing stop ???
for example i buy at 1 $ go long i start to earn in trend after 10 minutes 1.50 $ where i must to put the stop at 1.40 1.30 ???
i know there is a formula which use Average true range to calculate the trailing stop ???
thanks a lot

[Soultrader]

Originally Posted by rod30 »

i ve got a problem when i go long or short i start to earn money but i dont know when i must to exit so my profit became lost i use 1 minute chart with Exponetial moving average i buy and sell on breackout does any one knows the formula where to put stop loss and the trailing stop ???
for example i buy at 1 $ go long i start to earn in trend after 10 minutes 1.50 $ where i must to put the stop at 1.40 1.30 ???
i know there is a formula which use Average true range to calculate the trailing stop ???
thanks a lot

First... are you making money trading off a 1minute? I ask this because almost every single trader I met will the say the same thing. 1 minute charts are not for trading... way too much noise.

Second, your stops should be dependent on your particular setup/trade. For example, are you fading the previous day high? If so, a stop above this level would make sense. Are you buying a pullback of an uptrend? A stop below the previous swing low would make sense. Playing breakouts? A stop below the breakpoint and then move to b/e would make sense. Why are you entering a buy/sell? Based on what? You need to study your strategy and reasons for the trade more in depth in order to find the stop placements that are optimal for you. Some use stops that are dependent on volatility, ATR, candles, pivots, or fixed stops. Perhaps post a chart of a particular trade and members here can add some input so you can figure this out.

[rod30]

konnichiwa soul trader genki

[Soultrader]

Originally Posted by rod30 »

konnichiwa soul trader genki

Hi genki desu. Are you Japanese btw?

[torero]

As a general rule: you place a trailing stop when there's a runaway market such as fed news, etc. where there is little chance of pullbacks. In other market conditions, a normal stop loss order would be advised. Of course the trick on using trailing stop is how far a distant do you put? Another puzzle indeed.

[BlowFish]

Most charting packages have an ATR function. People tend to use a multiple from memory about 1.5 to 2.5 times the ATR are common. Katsz discusses this at some length in The Encylopedia of Trading Systems, probably available from a Library. Chandelier stops are quite highly thought of I believe. You could use the last SH SL (swing high swing low) to hide your stop behind. Or even simpler just use the last 1 2 or 3 bars low. Or 2 consecutive down bars or or or

Anyway hopefully there's a couple of useful ideas in there for further research.

[rod30]

i want to understand how to use ATR FORMULA for example
14 ATR in a five minute chart ATR when my sistem give the signal ATR= 0.6
Eur/USD 100.000 $ on account i risk 1% = 1000$ = 1 Unit
1 lot = 10$ profit- loss / Pip right
how many lot i can buy ???
0.6*10= 6 lot
1000/ 6 = 166 lots
is this right ?? i cant understand how to transform ATR value its right ATR * 10 $ ?
thanks a lot for your patience

[BlowFish]

ATR is simply the range (H-L) adjusted for the last bar close (If the close is outside the range of the current bar (market gaps) you adjust the range to last bars close.

14 ATR will be a moving average of the last 14 ATR's. This can result in rather tight stops so people use a multiple of this, 1.5 to 2.5 is common depending on how tight a stop you want.

Lets say the ATR is 10 pips for a 5 min bar. (ATR is in the same units as price because it is a range) Lets also say you determine you want to use 2*ATR to keep you in trades through some small wiggles. Obviously you will need to risk 20 pips (2 * 10) (actually it may be a little more as I believe you would add the stop to the bottom of the current bar). Once you know the absolute number of pips you need to risk (20) you can calculate the position size based on how much of your account you want to put at risk.

Google should reveal nearly all you could possibly want to know though Katsz is a good reference to get an idea of what changing the multiplier might do to your results.

Cheers.