Biggest issue I am having on my demo account is where to place the stops for the style I'm wanting to trade.
It's a demo account but I am attempting to be as unbiased as possible and pretend it is real money to try and simulate a real trading position and how I might react to a situation.
For the moment I am learning support and resistance and entry points. I have been placing my working orders 5 ticks above the max price for a three day range to trigger once it hits that price. Once in the trade I am wanting a goal of 5 ticks above the spread, which is 4 points (2pt spread, 2pt GSTOP), so 9 ticks total, OR, break even and exit the trade and not scoffing if the price ends up going my way later on down the track - if I find myself upset I just chant the mantra "this isn't gambling, it was a bad position".
Here's the thing, though; my stops are placed underneath a bare bottom price within that range, which is always something like 20-30, sometimes even 50 points underneath my entry.
Something just doesn't seem right when I'm willing to risk 30-50 points to gain 9. This is no way to trade.
So, to everyone out there who trades indices, how do you logically deduce a position for a stop-loss, and why?