What percent should the stoploss be on hourly chart?

#1
Hi experts

I was told by a Mentor of my friend,
use 7% as stoploss on daily chart.

I accepted.

My question is
how much percentage should the stoploss be on hourly chart for stocks?

Can somebody give me a logical answer please!!!

I am waiting for an experts answer.
others please excuse!

This question is related to percentage based stoploss.
 

KelvinHand

Well-Known Member
#2
Hi experts

I was told by a Mentor of my friend,
use 7% as stoploss on daily chart.

I accepted.

My question is
how much percentage should the stoploss be on hourly chart for stocks?

Can somebody give me a logical answer please!!!

I am waiting for an experts answer.
others please excuse!

This question is related to percentage based stoploss.
How you calculate the 7% stoploss ?

If you accepted 7% stoploss in daily. You did not ask for reduction, so logically you are no problem to use 7% in hourly. :cool:
 

pratapvb

Well-Known Member
#3
Hi experts

I was told by a Mentor of my friend,
use 7% as stoploss on daily chart.

I accepted.

My question is
how much percentage should the stoploss be on hourly chart for stocks?

Can somebody give me a logical answer please!!!

I am waiting for an experts answer.
others please excuse!

This question is related to percentage based stoploss.
personally I feel that the chart should decide the SL like a pvt or 2bar (ignoring sideways bars) in higher TFs like hourly/daily.

The position sizing should be done based on how far the intial SL is at the time of entry based on %risk one is willing to take, say 2% for positional (am assuming it is positional as TF is hourly/daily)
 

KelvinHand

Well-Known Member
#4
personally I feel that the chart should decide the SL like a pvt or 2bar (ignoring sideways bars) in higher TFs like hourly/daily.

The position sizing should be done based on how far the intial SL is at the time of entry based on %risk one is willing to take, say 2% for positional (am assuming it is positional as TF is hourly/daily)


http://www.learntotradethemarket.co...o-place-stop-loss-profit-target-forex-trading


This is likely Fork7k's percentage stoploss talk:
http://www.learningmarkets.com/how-to-determine-where-to-set-a-stop-loss/

other than The percentage method, there are also:
- The support method
- The moving average method
of stoploss setting.
 
Last edited:
#5
Hi KelvinHand

Thanks for the pointer.
I commented on that site becoz
I felt he forgot something really important
and better option than percentage based,sr based,ma based stops-the volatility based stop.


Technically, stoploss must be dynamic and adjust with market movements-volatility.
Using a FIXED percentage stop in low and high volatility market environment puts the trader at big disadvantaGE.

Yes,basically I prefer Volatility based stoploss above anything else.
The best is JIMBERG trailing stop which trails price at a distance of 2ATR.
This dynamic stoploss works best.

Of course there is another channel of thinking that the stoploss need to begin bigger at 3ATR initially and must taper down to 2ATR as price stops moving up.

The problem is two fold here.
First that mentor was NOT ready to talk about stoploss percentage on hourly charts.
I know the percentage for hourly charts is to be less than 7%, but it doesnot go down in direct proportion.
To my view it may come to 4% or 5% for hourly charts based on my random observations for three stocks.

I agreed about 7% stoploss for daily charts as there is historic reference
of William O,neil,gradpa of american stockmarkets who saved millions by his this single tip.
----------------------------------------------------------------------
Here is percentage stoploss code.
This is part of silvian svapo system.
If anybody likes to experiment,he can change percentage setting from 7 to 10 or 4 or 5 in the parameters.

---------------------------------------------------
HTML:
//LISTING 3: Trailing stop reversal

stop = Param("Trailing Stop", 7, 0, 20 );

trail = Null;

for( i = 1; i < BarCount; i++ )
{
prev = trail[ i - 1 ];
Cur = 0;
if( prev == C[ i ] )
Cur = prev;
else
if( C[ i - 1 ] < prev AND C[ i ] < prev )
Cur = Min( prev, C[ i ] * ( 1 + stop/100 ) );
else
if( C[ i - 1 ] > prev AND C[ i ] > prev )
Cur = Max( prev, C[ i ] * ( 1 - stop/100 ) );
else
if( C[ i ] > prev )
Cur = C[ i ] * ( 1 - stop/100 );
else
Cur = C[ i ] * ( 1 + stop/100 );

trail[ i ] = Cur;
}

Plot( C, "Price", colorBlack,stylecandle );
Plot( trail, "Trailstop", colorRed );
 

KelvinHand

Well-Known Member
#6
Hi KelvinHand

Thanks for the pointer.
I commented on that site becoz
I felt he forgot something really important
and better option than percentage based,sr based,ma based stops-the volatility based stop.


Technically, stoploss must be dynamic and adjust with market movements-volatility.
Using a FIXED percentage stop in low and high volatility market environment puts the trader at big disadvantaGE.

Yes,basically I prefer Volatility based stoploss above anything else.
The best is JIMBERG trailing stop which trails price at a distance of 2ATR.
This dynamic stoploss works best.

Of course there is another channel of thinking that the stoploss need to begin bigger at 3ATR initially and must taper down to 2ATR as price stops moving up.

The problem is two fold here.
First that mentor was NOT ready to talk about stoploss percentage on hourly charts.
I know the percentage for hourly charts is to be less than 7%, but it doesnot go down in direct proportion.
To my view it may come to 4% or 5% for hourly charts based on my random observations for three stocks.

I agreed about 7% stoploss for daily charts as there is historic reference
of William O,neil,gradpa of american stockmarkets who saved millions by his this single tip.
----------------------------------------------------------------------
Here is percentage stoploss code.
This is part of silvian svapo system.
If anybody likes to experiment,he can change percentage setting from 7 to 10 or 4 or 5 in the parameters.

---------------------------------------------------
HTML:
//LISTING 3: Trailing stop reversal

stop = Param("Trailing Stop", 7, 0, 20 );

trail = Null;

for( i = 1; i < BarCount; i++ )
{
prev = trail[ i - 1 ];
Cur = 0;
if( prev == C[ i ] )
Cur = prev;
else
if( C[ i - 1 ] < prev AND C[ i ] < prev )
Cur = Min( prev, C[ i ] * ( 1 + stop/100 ) );
else
if( C[ i - 1 ] > prev AND C[ i ] > prev )
Cur = Max( prev, C[ i ] * ( 1 - stop/100 ) );
else
if( C[ i ] > prev )
Cur = C[ i ] * ( 1 - stop/100 );
else
Cur = C[ i ] * ( 1 + stop/100 );

trail[ i ] = Cur;
}

Plot( C, "Price", colorBlack,stylecandle );
Plot( trail, "Trailstop", colorRed );
Iwas tempted to post you the AFL before you:
http://www.traders.com/Documentation/FEEDbk_docs/2009/05/TradersTips.html#TT4


As long as 7-10% pain level is comfortable to you, This to me is more for break out trader.
If you do retracement trading, i think you may reduce further 5% and below with hourly trading.
 
Last edited:

nac

Well-Known Member
#7
7 is too much...

Assume one shorted NF under 5700 with the s/l of 6000.

MFE - 550 points (approx); but s/l hit today @ 5550. Just 150 points. Lost 400 points profit.

It's better to combine multiple s/l options.
* Start with volatility based
* If the a/c size is small and couldn't size position when trading in futures, filter the signals based on percentage based.
* After getting 1R profit, don't give back the too much of profit. Move TSL to 50% of profit. Can move to 40%, 30% 20% as the position moves in favour...
 

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