Tips on stop loss position for swing trading

[u0362565]

Hi all, when swing trading I'm looking for tips on when to move the stop loss if at all. Probably a how long is a piece of string type comment. For example I know it's common to move the stop to the last swing low on that time chart but what if that next swing low hasn't occured yet but you are in profit. The profit is not more than the original stop location therefore you havent made more than you're in theory risking. I guess you just wait it out? Lifting the stop could stop you out early but the reverse is also true of course. There isn't really a right answer but interested to know how others think about this.

Thanks for any advice.

[Caseynotes]

47 minutes ago, u0362565 said:

Hi all, when swing trading I'm looking for tips on when to move the stop loss if at all. Probably a how long is a piece of string type comment. For example I know it's common to move the stop to the last swing low on that time chart but what if that next swing low hasn't occured yet but you are in profit. The profit is not more than the original stop location therefore you havent made more than you're in theory risking. I guess you just wait it out? Lifting the stop could stop you out early but the reverse is also true of course. There isn't really a right answer but interested to know how others think about this.

Thanks for any advice.

This has a good run down on different methods for trailing stops.

https://www.tradingwithrayner.com/trailing-stop-loss/

[u0362565]

Nice simple article thanks. One thing I'm not sure on is this partial sell of units. How do you do that with IG? On the app at least can't see a way to do it.

 

[Caseynotes]

7 minutes ago, u0362565 said:

Nice simple article thanks. One thing I'm not sure on is this partial sell of units. How do you do that with IG? On the app at least can't see a way to do it.

 

you need to be in non-hegding mode, on the web based platform that is 'Net Off' (not force open).

So if your trade is Long 5 then if you sell 1 then your overall position is now Long 4.

[THT]

15 hours ago, u0362565 said:

Hi all, when swing trading I'm looking for tips on when to move the stop loss if at all. Probably a how long is a piece of string type comment. For example I know it's common to move the stop to the last swing low on that time chart but what if that next swing low hasn't occured yet but you are in profit. The profit is not more than the original stop location therefore you havent made more than you're in theory risking. I guess you just wait it out? Lifting the stop could stop you out early but the reverse is also true of course. There isn't really a right answer but interested to know how others think about this.

Thanks for any advice.

This is subjective as it solely depends on your trading method and reason for the trade

When a swing low happens, it provides a line in the sand - if the market is trending UP then the prior swing high HAS to be closed above - its the LAW of the market (see chart below for proof)

Now you can SEE that once that happened the market retraces to create a new swing low point - there's no law regarding how much it will retrace, its just a given that it will retrace some degree - YOU need to work out what you're OK with

If you look at the chart - the LAST up swing from 11th Aug 2020, you'd be crazy to have left the stop at the last swing low - If you examine the last up swing carefully, you will SEE the mini internal swings (highs and lows) within that structure that would have allowed you to place stops on and markets do not go on rising at an angle like that for long

[u0362565]

3 hours ago, Caseynotes said:

you need to be in non-hegding mode, on the web based platform that is 'Net Off' (not force open).

So if your trade is Long 5 then if you sell 1 then your overall position is now Long 4.

Hmm ok it is definitely net off but can't see where you can do this in the menus. Looks like you either close all or nothing.

[u0362565]

3 hours ago, THT said:

This is subjective as it solely depends on your trading method and reason for the trade

When a swing low happens, it provides a line in the sand - if the market is trending UP then the prior swing high HAS to be closed above - its the LAW of the market (see chart below for proof)

Now you can SEE that once that happened the market retraces to create a new swing low point - there's no law regarding how much it will retrace, its just a given that it will retrace some degree - YOU need to work out what you're OK with

If you look at the chart - the LAST up swing from 11th Aug 2020, you'd be crazy to have left the stop at the last swing low - If you examine the last up swing carefully, you will SEE the mini internal swings (highs and lows) within that structure that would have allowed you to place stops on and markets do not go on rising at an angle like that for long

Yeah ok thanks. Its perhaps an issue of picking the time frame as well. I want to just determine stops and limits based on one time chart but it's tempting to look at shorter time frames to see more detail on whats happening and then you can see additional swings but I assume you ignore these.

[Caseynotes]

2 minutes ago, u0362565 said:

Hmm ok it is definitely net off but can't see where you can do this in the menus. Looks like you either close all or nothing.

 the net off option is on the deal ticket so if net off is selected then with a long trade already running any sell order that is less than the total long will just subtract from the total, so you are just scaling out of the overall position.

Any sell order that is equal to the total long position will just close the whole long position.

If instead you are wanting 2 trades running simultaneously in opposite directions (hedging) you need to select 'Force Open'  not net off.

[THT]

24 minutes ago, u0362565 said:

Yeah ok thanks. Its perhaps an issue of picking the time frame as well. I want to just determine stops and limits based on one time chart but it's tempting to look at shorter time frames to see more detail on whats happening and then you can see additional swings but I assume you ignore these.

There's more noise on Intra-day timeframes but they all do the same thing at the end of the day only more frequently 

There's no perfect setting for stops - its what suits you through trial and error, testing etc

I work off Daily charts

[u0362565]

6 hours ago, Caseynotes said:

 the net off option is on the deal ticket so if net off is selected then with a long trade already running any sell order that is less than the total long will just subtract from the total, so you are just scaling out of the overall position.

Any sell order that is equal to the total long position will just close the whole long position.

If instead you are wanting 2 trades running simultaneously in opposite directions (hedging) you need to select 'Force Open'  not net off.

Ah ok sorry I see where you're going, a small opposing position basically would offset it. So if I were long £10 per point and I short £5 I've basically reduced my position by half so long as net if off. Have I understood that right? I thought perhaps there was some other means to scale back on the platform. Thanks  

[u0362565]

6 hours ago, THT said:

There's more noise on Intra-day timeframes but they all do the same thing at the end of the day only more frequently 

There's no perfect setting for stops - its what suits you through trial and error, testing etc

I work off Daily charts

Well I'm certainly good at being indecisive which is not helped by switching time frames. I'm also trying to concentrate on daily charts. Thanks for the input

[u0362565]

13 hours ago, u0362565 said:

Ah ok sorry I see where you're going, a small opposing position basically would offset it. So if I were long £10 per point and I short £5 I've basically reduced my position by half so long as net if off. Have I understood that right? I thought perhaps there was some other means to scale back on the platform. Thanks  

Also realised that I have one click trading enabled. If you disable that you have access to partial close, not tested but read on ig website.