“when did the price go as deep as my Stop Loss?” If it has happened several
times in the current chart, why would you think your Stop Loss will not be hit
now?
The ideal Stop Loss should be greater than the trend drawdown.
Listen to the market, not to the pips. In the example above, the Stop Loss
should be at least 233 pips. Too much? Well, use a smaller lot size. If you trade 1
minilot and $233 is above your risk tolerance, then use microlots. Or don't take
the trade. The worst thing you can do is use a small pip value just because you
want a small risk. Actually, you would risk more because if you don't give the
market enough space to breath, the Stop Loss would likely be hit regardless of
how good your trading system (or reliable the trend) is.
You would do well if you would use the trend drawdown + 1 pip as the pip
value for the Stop loss (233 + 1 = 234 pips in the example). If you want to
increase the success rate but on the other side, increase the risk when
compared to the profit potential, your Stop Loss should be set at a much safer
1.5 x trend drawdown.
Stop Loss = 1.5 x trend drawdown = 1.5 x 233 pips = cca 350 pips
Some traders would prefer even 2 x trend drawdown = 466 pips. Such Stop
Loss would be safe enough from the wild market. It's all about statistics.
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