If you're forward testing already, you will have a good idea of what your win probability is.
It's important to do a calculation to see what your ideal stop should be set to so that your profits will end up exceeding your losses.
For example, if you expect to earn 50 pips on 60% of the trades with a 20 trade run, you can expect to gain $600 from these trades. However, you will be stopped out 40% of the time. If you set your stop to 40 pips, you will end up with $280 net profits. However, if your stop is set to 75 pips, you will have no net profits. And if your stop exceeds 75 pips, you will have a net loss.
Happy trading!
Disclaimer: Do your own homework. Do not in any way take this to be investment advice. You are responsible for your own portfolio.
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