[Jerry]

Hello David..I am happy I stumbled across your website...good solid info is hard to find. Im thankful for that....straight to the point...I have been practicing for 1 year in demo...I did go live at one point, but quickly lost my money, and I feel I was stop hunted....but even during practice...I have a difficult time determining how far away to place a stop (changes per time frame)... I do want to give the trade room to breath (noise), but also want to protect profit at the same time....how far away would you place a stop for the 1hr , 4 hr, and daily time frame...
Thank you in advance for your reply...
Jerry

[David Waring]

Hi Jerry,

Thanks for the comment I am glad you like the site and welcome to the community.

Let me start by saying that unless you were trading with a very small firm or doing very large position sizes, the odds that someone was watching your stops and stop hunting them are very small. The reason I say this is that for this to be profitable the stop has to be on a large enough position that if the market maker moves the market to get your stop the negative consequences that they suffer of other orders taken in at that level that may not be in their favor and hits to reputation are offset.

One of the reasons why technical analysis works is because a lot of traders think alike and therefore are going to have stops at similar levels which are going to be turning points in the market beause they represent areas of the most pain. This is simply how trading works and I think ever trader out there who has traded for any amount of time will tell you about positions they have had in the market where the market hit their stop and then immediately turned around. While it seems like something is fishy going on there the times when there actually is from my experience are small.

As to the rest of your question, there is not really one answer that I think most traders would give to exactly how far away from an entry price to place a stop because the answer is going to vary depending on how much money you have to trade, you much money you are willing to risk per trade, the support and resistance levels identified on the chart of the instrument that you are trading, the volatility of that instrument, and your profit target.

In order to help traders determine where to place stops for themselves, we have a series of videos which shows how to use the answers to each of the above questions to determine how far you should place your stop no matter what the instrument you are trading or the timeframe. You can find these videos in the free basics of trading course the the free course section of the site and at the links below:

Money Management: How to Determine an Initial Stop Level

How to Set Stops Using the Average True Range (ATR)

How to Up Your Chances For Profits When Setting Stops

How to Reduce the Chances of Being Stopped Out on a Trade

How Many Successful Traders Incoporate Indicators When Placing Their Stops

Have a look through those and the feel free to post any questions you have on anything that is not clear after that.

Best Regards,
Dave

[Jerry]

Hello David....# 1..thanks for your rapid, and genuine reply....makes perfect sense now...I will visit the vido links as you suggest... (that is the first solid answer Ive ever heard/read to that question....Thanks... I feel like Ive hit the jackpot of information on this site....thanks...Jerry

[David Waring]

Originally Posted by Jerry

Hello David....# 1..thanks for your rapid, and genuine reply....makes perfect sense now...I will visit the vido links as you suggest... (that is the first solid answer Ive ever heard/read to that question....Thanks... I feel like Ive hit the jackpot of information on this site....thanks...Jerry

Hey Jerry,

Glad I could be of help and glad you like the site. Look forward to seeing you around the site and speaking with you further.

Best Regards,
Dave