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real world stops and risk reward ratio.

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Trading Experience: Beginner
Favorite Futures: MES
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Posts: 681 since Feb 2019
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Salao View Post
So I've been doing a lot of market replay practice this weekend...Ignoring chores around the house for now. HA! I've been experimenting a little with STOP placement. I generally use Al Brooks methodology on placing stops, or I should say ATTEMPT to us Al Brooks methodology!. Generally you are putting stops 1-tick below a signal bar or entry bar, but sometimes they are going below that last swing high/low. During my market replay I've been attempting to learn price action and I'm also experimenting with different idiosyncratic modifications. One of these experiments has been the use of a fixed two point stop and it's been working really well. I've been trading 2 contracts, I take 1 off at 2 points (1R) and letting the other run for a swing. Are there many traders out there that use a fixed risk amount on every trade? Is it effective for them?

Hey @Salao! I used 2-point/8-tick stops exclusively up until recently. They seemed to work in sim but since reading Brooks I've started trying those wider stops live with /MES, no conclusions yet.

I love the 8-tick loss because they're so manageable, but your timing and trade-location have to be on point. 16-ticks has been nice with the /MES I think my win% is much improved for live trading with the 4-point stop, but there are a lot of variables involved that might also be factoring in (not as stressed at $1.25/tick so better judgment perhaps being one).

I think I need to try the /ES and see if I can stomach a 16-tick stop. I don't really like taking more than that , ie OVER 4-point losses), maybe because many of my winning trades are far below that currently so it seems skewed against me, which is another problem entirely!

Hope you're having a great weekend, happy trading!

Last edited by snax; June 8th, 2019 at 07:16 PM. Reason: Terrible math, I meant over 4-points, ie; 5+ point losses
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