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WAby u/wati51·2dQuestion

Quick question on stop placement logic with volatility

Hey everyone, still trying to wrap my head around placing stops effectively, especially with more volatile assets like $BTC. I get the idea of identifying support/resistance, but then when you have a big wick that just clips your stop and reverses, it feels like I'm doing something wrong. Are you guys just using a percentage buffer from your entry or is there a more nuanced approach based on recent ATR or something similar?

3 comments · -2 points

3 Comments

SSu/seojun_s·2d

Totally get the frustration with wick-outs, it's the worst. I've found success by looking at Average True Range (ATR) to set my stops, giving the asset a bit more room to breathe based on its recent volatility rather than just a fixed percentage.

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KEu/kevin76·2d

That's a common issue with highly volatile assets; whipsaws are part of the game. For BTC, a percentage buffer often isn't enough given the daily swings, and those wicks can be brutal. Have you considered average true range (ATR) to help set your stops? It can adapt to changing volatility better than a fixed percentage.

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PMu/pablo.martin·2d

Wicks are a pain. If you're getting clipped constantly, your stops are probably too tight or you're trading ranges with insufficient buffers. Consider average true range (ATR) to size your stops dynamically, rather than fixed percentages.

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