I stopped getting wicked out when I started putting the stop a few pips past the sweep, not on it

[Fairman]

For a long time I put the stop right on the sweep wick, or a pip beyond it, because that was 'the invalidation'. Then the wick would go a few pips further, take me out, and the trade I wanted would run without me.

The change was small. I wait for the sweep to print, then I put the stop a few pips past the wick, not on the wick itself. On the EURUSD schematic it's a long after equal lows around 1.10650 get run down to 1.10542. Same entry at 1.10640, same target at 1.10790. Stop A sits on the wick at 1.10540 and is hit. Stop B sits at 1.10525, a little beyond that 1.10542 wick, and it holds.

Yes, the stop is wider, so the lot is smaller. On the wick it's about 10 pips to the entry. Past the wick it's about 11.5 pips. That's not a huge change, but on messier days the extra 4 or 5 pips past a deep wick matters, and then the lot has to come down to keep risk at $40.

I still get stopped. I just don't get stopped as often by the same wick that created the setup.

19-stop-past-the-sweep.png (82.08 KiB) Viewed 48 times

[Amanhasnoname]

This is one of those adjustments that sounds trivial but changes the stop-out rate a lot. The wick that forms the sweep is where the liquidity was taken, and price very often comes back to retest that exact low before it moves. Putting the stop right on it means you are parked where the next round of stops is sitting, and the market only needs a pip or two to clear you out.

Giving it a buffer of one and a half to two pips past the wick, plus the typical spread for that time of day, tends to be enough on EURUSD during London. On GBP pairs or around news the buffer needs to be wider, so it helps to base it on recent spread rather than a fixed number.

The lot size point matters most. Calculating size from the final stop distance after the buffer, not the wick distance, keeps the dollar risk honest. Many traders widen the stop and forget to cut size, which turns a good fix into a bigger loss when it does fail.

[Fairman]

How many pips past the wick? On EURUSD I use 2 to 4 pips, depending on how violent the sweep was and what the spread is doing. On GBPJPY I'll use 3 to 5 because the noise is larger. On gold I think in dollars, usually $2 to $4 past the wick, as I wrote in the sizing post. There isn't a magic number. The point is 'beyond the wick', not 'on the level everyone else is using'. I write that cushion on the ticket before I send it, next to the lot size, so I don't quietly pull the stop back onto the wick once I'm in and want a tighter R.

[Fairman]

The effect on R is real and I accept it. A 10-pip stop and a 16-pip target is 1.6R. A 14-pip stop and the same target is 1.14R. People hate that. I'd rather have 1.14R on a stop that can actually survive than 1.6R on a stop that keeps getting sniped. I can make 1.14R a lot of times. I can't do anything with a journal full of 'almost' trades. If I need 1.6R to make the idea feel worth it, the answer is a better target or no trade, not a stop sitting on the liquidity I just watched get taken.

[Fairman]

It still gets hit, of course. Some sweeps have a second poke, and if my cushion was 3 pips and the second poke is 8, I'm out, which is correct, because now the idea is probably wrong. The change wasn't 'never get stopped'. It was 'stop getting stopped by the wick I already knew was coming'. When the second poke takes me out I don't immediately fade the other way either. I wait for a new close and a new retrace, same as any other failed idea. Reversing immediately is how one stopped trade becomes two.

[Fairman]

Pair by pair, I keep a small note of the typical extra cushion so I don't invent it in the moment. EURUSD 3 pips, GBPUSD 3, USDJPY 4, GBPJPY 4 to 5, gold $3. If the sweep is already enormous I'll just pass, because a $20 gold wick plus a $4 cushion plus the entry distance will blow through my $40 cap at any honest lot size. Those cushions are starting points, not laws. If the spread is already 3 pips on GBPJPY I'll add a bit more, and if gold's wick is messy I'll just pass rather than invent a $8 cushion I can't afford.

[WhitG47]

If the spread is already 3 pips on GBPJPY I'll add a bit more, and if gold's wick is messy I'll just pass rather than invent a $8 cushion I can't afford.

Fairman, that per-pair sheet is the right call... I used to eyeball it fresh every time and ended up second-guessing myself mid-trade, which is worse than just having the number written down.

Only thing I'd add is on USDJPY my 4 pips sometimes isnt enough around the Tokyo fix, spread does something daft for ten minutes and chews the cushion before the move even starts. Worth a line in the notes just for that window, mind you.