Q: I am new to trading forex. In a recent training, it was suggested that we start out by looking for 40 pips. My question – where should the stop loss order be placed if we are just looking for 40 pips?
A: I like using at minimum 2:1 risk to reward, thus I would use a 20 pips for my stop but when actively trading. This way a stop loss order can be set at -20 pips and money management would still give you a 2-to-1 risk to reward.
There are many way to trade some more successful than others. In the end it really depends on where you are in your financial life. What is your risk tolerance? You simply have to practice trade using a demo account until you are confident with your trading. Try to duplicate what you do and remove as many variables to your trading system as possible. The stick to it, remove emotions and focus on your system.