This Youtube video about Stoploss techniques provides some great Ideas for open trade management.
It reviews the use of the initial stop. break-even stop, Trailing stop, and the dynamic stop
Stoploss techniques Video Transcript
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hi everybody Alex from expert 4x in today’s video I’m going to be showing
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you the different types of stops and Stoploss techniques that we use in manual trading
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but to do that I’m going to have a look at our most recent da the money make
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money PA and if you look on your screen you can see that there are four options
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for stops there’s the initial stop-loss the move your stop loss to break-even
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option the trailing stop loss and then the dynamic trailing stop loss and i’m
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going to go through each one and show you how they work the easy one is the
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initial stop-loss essentially we can use an example we there’s a target of a
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hundred and a stop loss of 50 now if you use only the initial stop-loss what
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happens is the the the prices go up to one or two perps of your target and then
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come all the way back and stop you out in a transaction example like this where
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you’ve got a hundred per target and a 50-foot stop you can effectively lose a
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hundred and 50 pips the press can move it to your disadvantage 850 eps so it’s
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not essentially the based way stop to use your initial stop only then the
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second one of the Stoploss techniques is the break-even stop so
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move your stop to break even at a certain point so let’s have a look at
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how that one works ok so with the break-even stop with a hundred-foot
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target but venture 50 pips stop what you would tell the the stock to do is move
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the stock to break even when a certain profitability has been reached in this
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case we’re going to use 50 50 / safe when it’s move 50 pips towards its
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target move the stop to break even and that will make sure that the the
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transaction is risk-free great
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and it will also give you the protection so if the price reverses that you can
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the worst you can come out is break even
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it also has the disadvantage that the processing go all the way up to within
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one or two parts of the target come all the way back and effectively your street
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stop has allowed you to lose a hundred pips that’s the disadvantage of the
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break-even stock so let’s have a look at the trailing stop now i use the word
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followingstop and trailing stop interchangeably they mean the same thing
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so if we look at this followingstop example let’s say you’ve got a hundred
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people target a 50 / stop you then searches to the falling snow stopped of
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the trailing stop when I am 50 pips positive creative following stop that is
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50 pips big in this example and then trail it by every movement of ten pups
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that the price max so in other words when the price moves + 2 + 60 the
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trailing stop will follow by 50 pips Augustus 70 it will follow by 50 pips
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and then eventually the process of other hit the target or to stop great also a
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great tool to use advantage of this is that you become positive more quickly
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your results can be a positive but because you’re using a fixed amount all
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the time you can still end up giving back quite a lot in the end the price
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and come within 1 pick up your target and you could be giving back 60 pips to
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the market because you’re your process into the target but come and hit your
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followingstop very effective tool a big improvement on the initial stop and the
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break-even stop
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so let’s have a look at the dynamic stop now what the dynamic stop does then it’s
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a bit like a followingstop but it keeps the race show of your risk return ratio
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the same throughout the transection so for instance if you have a hundred
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people
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darker than a 50-foot stop that means your risk to reward ratio is one to two
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and therefore it will keep that ratio throughout the transactions that as the
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price is going up it will move the stop app to make sure that if the price comes
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down you are still losing in the risk-return ratio in this example for
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every 20 perps that the price moves closer to the target the stop will
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actually move 30 pips so it what happens is that it ends app squashing the price
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into the target and if there is a retracement George the mountains you’re
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giving back to the market is become smaller and smaller as the transaction
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happens in this petite in these particular settings you can decide how
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often you want your risk return ratio corrected you can do it 10 times in
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doing a transaction or you can do it five times two other in this particular
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example i’m showing you a five times correction so as you can see the stop
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becomes smaller guns from 52-42 3220 and 210 perhaps as you get closer and closer
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to that squashing the the price into the top also extremely effective and that
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has the advantage of not giving back to the market a lot of perps in in your mt4
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platform the only stop there is a vital automated stop is the trailing stop you
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will when you open a transaction and it’s active what you do is you
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right-click on the transection as you can see i’m doing right there and you
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then have a trailing stop facility so you can actually tell it by how many
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points you want your trailing stop to follow so there is the only automation
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in the mt4 platform in our pas as you can see we have those settings that
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now you to adjust all those stops that i have shown you so i hope you found this
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helpful question is which Stoploss techniques should i be using there is no definitive answer
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to that
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it depends on the currency the type of training technique use and a whole lot
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of other factors so the best is if you’re using an EA back trade that EA
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using it are using all four that stopped at $TIME meters and see which one is the
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base and if you’re using manual systems you’ll have to evaluate which stop you
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would like to use for again for me thank you for watching this
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Stoploss techniques video
Video Published on Sep 6, 2016
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