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Forex Trading: Why Your Stop Loss Isn't Great

Updated: Jul 5, 2023

When I began to swing trade, I didn't think I could get a reasonable stop loss in higher timeframes.

I am especially analyzing the daily and weekly timeframes.

1) Stop Loss Limited My Mindset

I wouldn't say I liked that my huge stop loss kept me from higher reward-to-risk trades.

I got so comfortable with 1:1 risk-to-reward ratios that I stopped challenging myself.

That's why I now use a mix of lower timeframes to decrease my stop loss while increasing my reward.

(By the way, if you can't tell, most traders struggle with this, and you may too.)

2) I only focus on timeframes that are trending

Analyzing the monthly and weekly timeframes is excellent.

If you want better and faster trades doing that every week can waste your time.

With time I've transitioned to the 12 and 4-hour timeframe and used it to make better profitable trades.

Next, I realized how efficient I became in identifying my trade ideas.

It used to take me 15 minutes to analyze one currency pair. It now takes me less than 1 minute.

No, I don't want to spend hours on a chart like a 9-5 job.

This is where most traders fail.

They take courses that cut down their learning and charting time, then do the opposite.

When they ask, "Shaquan, why am I not getting profitable?"

Are you entering your trades with the trend and waiting for the business to work for you?

Once they see the stop loss, they tend to forget theirs in a low-risk trade.

They neglect the power of the trend.

3) Your lot size is the combination of the right timeframes

Backtesting, demo trading, and live trading require a skill.

Those skills are applied to timeframes.

If the 12-hour timeframe, like the one below, doesn't provide you enough information for a proper stop loss, take profit, or entry, do this one thing-GO DOWN IN TIMEFRAMES.

The following timeframe under the 12-hour is the 4-hour timeframe.

It takes three 4-hour candlesticks to make up one 12-hour candlestick.

From the chart above, how would you trade this?

Don't think your strategy fails if you cannot identify what to do here.

You need more information, and our information as traders is in the form of candlesticks.

Let's look at a 4-hour chart.

Same chart, different timeframe

My point is:

You can drop down a timeframe without changing your analysis, bias, or actions and get a better stop loss.

Now imagine if you could see this on a more consistent basis.

In other words, you can identify higher reward-to-risk trades by going down one timeframe from where you analyze your charts to get a better entry and decrease your stop loss.

In my Trade On Purpose Community, I teach this fast approach to turning your trade ideas into profit. This is the last day to enroll in the community for $499.

Now, why it takes me 1 minute

Because I asked God to help me.

I don't know if it sounds cliche, but it's true. I was tired of being depressed and anxious in life.

I was trying to make trading work so I didn't have to continue working at a sales job.

There is nothing wrong with a 9-5, but I wanted my time. I wanted to be with my children.

I was tired of being told what to do by racist managers.

So, God helped me create a better strategy that flowed.

"Timeframe change but rules stay the same."-Shaquan

I'm going to end it here, but that statement is true. So, if you want a better stop loss and entry, change the timeframes and keep your rules the same.


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25 ago 2023
Obtuvo 5 de 5 estrellas.

That was very helpful !

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