Stop Loss and Take Profit Strategies for Traders, When Creating EA’s
Angiterver4 min read·Just now--
part 2
When I first started trading, I thought the entry was everything. I’d spend hours looking for the perfect setup, only to watch my account bleed because I hadn’t thought enough about exits. Over time and after blowing a few accounts, I realized stop loss (SL) and take profit (TP) rules are the real backbone of survival. The way you manage exits often matters more than the entry itself.
Below, I’ll walk through the different types of SL and TP approaches I’ve used or seen other traders apply, along with some advanced combinations that can make your system more resilient.
Stop Loss (SL) Approaches
1. Fixed Stop Loss
A constant pip distance from entry. Example: Buy at 1.2000, SL = 50 pips → 1.1950. Simple, but not adaptive.
2. Percentage Based SL
Risk a set % of your account per trade. Example: $1,000 account, 2% risk = $20. EA calculates lot size so SL loss = $20. This was the first method that helped me stop over leveraging.
3. ATR Based SL
Uses Average True Range to measure volatility. Example: ATR = 20 pips, SL = 1.5 × ATR → 30 pips. I remember a trade during NFP where ATR saved me, my SL widened just enough to avoid a stop out before price reversed in my favor.
4. Swing High/Low SL
Based on market structure. Example: Buy trade → SL below last swing low (1.1980 → SL = 1.1975). This is my go to when trading price action setups.
5. Candle Based SL
Uses previous candle levels. Example: Enter after bullish candle, SL below that candle’s low.
6. Time Based SL
Close trade after a set time. Example: Trade open for 2 hours → close if not profitable. I use this to avoid “dead trades” that just drain margin.
7. Break Even SL
Move SL to entry after profit. Example: Entry = 1.2000, price hits +30 pips, SL moves to 1.2000. I learned this the hard way, watching a +40 pip winner turn into a loss taught me to protect capital.
8. Trailing Stop Loss
SL follows price as it moves in profit. Example: Price moves +50 pips, SL shifts from ‑50 to +20. I once caught a 200‑pip move thanks to a trailing stop that kept me in longer than I would have manually.
9. Volatility Based SL
Adjusts depending on market speed. Example: During news → SL widened; during calm → SL tightened.
10. Equity Protection SL
Protects your account as a whole. Example: Max daily loss = 5%, EA closes all trades once hit. This is non‑negotiable for prop firm accounts.
11. Hidden (Virtual) SL
Not sent to broker. EA closes internally at ‑50 pips. Some traders swear by this to avoid stop hunting.
12. News Based SL
Adjust SL around major events. Example: Before news → widen SL or disable temporarily.
Take Profit (TP) Approaches
1. Fixed TP
Set profit target. Example: Entry = 1.2000, TP = 100 pips → 1.2100.
2. Risk Reward TP
Based on SL ratio. Example: SL = 50 pips, TP = 100 pips (1:2 RR). This ratio helped me finally see consistent growth.
3. ATR Based TP
Uses volatility. Example: ATR = 20 pips, TP = 2 × ATR → 40 pips.
4. Support & Resistance TP
Target key levels. Example: Resistance = 1.2100, TP just below → 1.2090. I still remember closing just before resistance and watching price stall exactly at that level.
5. Trailing TP
Profit target moves as price moves. Often paired with trailing SL.
6. Partial TP (Scaling Out)
Close parts of trade gradually. Example: Close 50% at +50 pips, let rest run to +100 pips. This saved me countless times when price reversed after hitting my first target.
7. Time Based TP
Close after time in profit. Example: Trade in profit for 1 hour → close.
8. Indicator Based TP
Exit when indicators signal. Example: RSI overbought, MA cross, Bollinger band hit.
9. Opposite Signal TP
Close when reverse signal appears. Example: Buy trade → close when sell signal forms.
10. Equity TP
Close all trades once a profit target is reached. Example: daily target of +$100.
11. Hidden (Virtual) TP
Not visible to broker. EA closes internally at +80 pips.
Advanced and Combined Methods
Most profitable EAs don’t rely on just one type of SL or TP. They combine several for flexibility:
1. Candle base SL, Break‑even + ATR buffer + trailing + TP at 1:3 RR, my Recommendation
2. ATR SL + structure SL.
3. Partial TP + final TP.
4. Equity protection (a must for funded accounts).
5. Swing low SL + ATR buffer, TP at 1:2 RR, with break‑even at 1R, trailing after 1.5R, and partial TP (50% at 1R).
Final Thoughts
I’ve learned that the best systems are those that adapt. A fixed stop loss or take profit might work in calm conditions, but markets change volatility spikes, news hits, and trends reverse. That’s why combining methods is so powerful.
If you’re building an EA or refining your manual trading plan, don’t just pick one SL/TP type and stick with it. Layer them, test them, and always keep equity protection in place. At the end of the day, trading is about survival first, profits second.
I’ve had trades where a trailing stop turned a small win into a big one, and others where moving to break‑even saved me from frustration. Those experiences taught me that risk management isn’t just theory, it’s the difference between staying in the game and blowing up.
contact me on telegram: t.me/Angiterver
Happy coding and trading and remember, proper risk management is what keeps you in the game.
