Stops are key?

[dene]

As a starter to this game, I have latched on to the fact that setting stops seems to be the difference between winning and losing. Trouble is, I can't seem to find the right formula.

TC suggests 30 -35 pips, but with GBP at 1.6xxx and JPY at 118.xx, surely there is a % difference factor here? i.e. 10% move on the latter is much less than the same percent on former. I'm also a bit uncomfortable losing 120 pips across the majors if things go belly up, which has happened (partly due to time differences here--I'm often asleep when the good (and bad) stuff happens

My current strategy is to ramp up my stops progressively as the trade starts going my way (hah, as if!), yet I see others prepared to move them both ways. Why have stops at all then?

Does anyone use ATR, SAR or any other fancy technique? Or is it just rule of thumb?

[Mongoose]

Depends upon your timeframe and system.

I use a Bollinger Breakout System which has up to 200 pip stops on a 4hr timeframe, and another breakout technique that I use on a 30min chart, and a triangle system that I use on 30min which are up to 30 pip stops.

All in all, if you have a system, make sure it is robust, then optimize the stop widths on Tradestation.

Profit factor > 2
Largest Gain / Total Profit * 100 < 50%
Average Gain Covers Comission

I post my trades live on:

www.stockcentral.com.au/forum;
and give answers to specific questions with Tom Basso on www.tradexglobal.com