Good post. One more point with regards to the risk/reward ratio. Some have said it isn't a helpful concept in placing stops. I would agree that entering then automatically using a fixed risk/reward ratio for SL / TP is a suboptimal concept. The more optimal concept is to use the desired risk/reward ratio as a filter to evaluate possible entries before you actually enter them. As Mishak states if you are only willing to accept deals for instance where you have a chance to make $2 for every $1 lost you would look where you would need to put your stop loss where you could take a profit if it falls outside the ratio you skip the trade. However you might be able to shoot for $4 on the current trade but have to risk $1.5 to make it so in that respect where you actually place your target stop should be more dictated by the support resistance areas. If you use an arbitrary $1 stop $2 target in the previous example you will tend to stop out more often than not also cut your profit short by half when it does go your way. I hope that further clarifies an already excellent post by Mishak.
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Originally Posted by mishak
Stops should be placed not at a fixed distance but below next support (above next resistance for shorts).
Correspondingly targets should be placed where you expect some congestion. Or maybe for fun somewhere outside bollinger bs just in case you have a wild market movement.
You should enter not at the current price but at the point not far enough stop-loss mark according to your money management rules. If current price occurs too far stop mark - just wait or skip this deal.
After you enter a position you may consider to check it time to time for any changes in the market to adjust your target or move trailing stop.
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Stops targets - how it should be
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