Stop Loss Control

[Denis Panfilov 1]

Hello,

I am fairly new to BBT and have a question about Stop Loss control.  What is the best way to accomplish this? Is this something that is done with orders, by placing a bracket trade in DAS defining your exit below (for long trades) or above (for shorts) of your purchase price - lets say 30 cents range for buy or sell - and then adjusting them manually to specific technical levels (like below VWAP, etc)? The problem with this approach  I find is that when doing 1 or 5 minute Open Range Breakout strategy, you get stepped out a lot since price fluctuates a lot. 

Or is this something done manually when you kind of remember when to step yourself out?  Problem with this approach is that price can drop a lot very quickly leaving you with a significant loss.

Please share how you control your stop loss.

Thank you

[JS 10]

Hi Denis,

New trader here as well. If you are with Das and IB, please check out Kyle's hotkey (fixed risk ) thread and it has been a game changer for most of us. 

 

[Denis Panfilov 1]

Hi James,

Yes!  I am somewhat familiar with Kyle's hot keys.  They are an excellent way to control various risks.  But my question is till not fully answered though: in reading Andrew's books he refers to various stop loss levels: VWAP, SMA, previous day close price, etc.  My question is this: when I place a trade (say I buy) what is the best way to put this Stop Loss at the technical level? I don't think Kyle's hot keys do that unless I am wrong?  The only way I know how to do this is to place ANY Stop Loss order (say a dollar below) and then manually move it to that technical level on the chart (say below VWAP).  But my problem is that in fast markets it may be a very slow process. Also for ORB strategy there is a risk of being stopped out by jumping price before it moves in your direction. I guess I could use Kyle's keys if I do the math of my potential loss from purchase price to my tech level and use that as my input? But again, would that not be too slow and expose you to risk of stop out?

Apologies if this sounds very naïve but I am still trying to learn the basics.

Thank you

[JS 10]

Hi Denis,

No apologies needed and we are all here to learn. 

I believe stop loss level is whatever level that your trading strategy/pattern is broken. It could be a technical level (VWAP, MAs etc) or it could also be low or high of previous candlestick( or middle of the range if the price in consolidation). Kyle's hotkey allows us to use our preferred level by allowing us to click on the chart to indicate our expected stop loss and at the same time make a fast entry. Since you are trading the open and price moves so fast, the slippage is unavoidable in this case. However, the potential reward is also very high. 

I myself do not trade within the 1st 5 mins so I am not the best person to answer your question but above is my take on it. 

 

[Denis Panfilov 1]

Thank you James.  So Kyle's key allow users to place trade AND stop loss directly on the chart?  That is exactly what I am looking for!  I always thought that those keys allowed you to control your P&L loss limits or total % of your account at risk.  I did not realize that you could actually click on the graph and submit trades directly. Do you know which script allows you to do this? The zip file provides a lot of code but I do not see the script to do this right on the graph.

[JS 10]

Check out William's video on Kyle's hotkey. I basically copy the scripts and adjust a bit. 

 

https://bearbulltraders.com/course/technology/lesson/setting-up-das/topic/dynamic-hotkeys-equalized-risk-per-trade/

In order for it to work, make sure do the following in your chart Config setting. 

 

Edited November 25, 2020 by Jiheng Sang