There is not any general guideline when setting stops or get profit's but generally you will want to keep your associated risk to reward a minimum of one, preferably 2 or higher
Should your not familiar with R:R, it is actually how much you intend to risk compared to. how much you plan to get,
An R1 would mean you are risking just as much as you would like to earn
An R2 means you're aiming for twice what you're risking
These are managed by stops and take profits.
An R1 would mean your take profit and stop are even
An R2 means your take profit is double your stop loss
A lot of first time traders will formulate a plan as they have been advised whereby they will be determined at utilizing a particular R:R such as 2:1, they will spot a setup and choose they plan to trade intra-day so there stop will probably be 30 thus allowing them an automatic take profit of 60.
Most of these trades are less likely to be very beneficial as there's no real idea behind the placement of stops or take profits.
It is best to take support together with resistance under consideration when placing stops and take profits, and by support and resistance I'm looking at drafted horizontal lines across recent highs, lows, double/ triple tops or bottoms, trend lines and also Fibonacci retracements. The best support and resistance is going to be where several of these coincide, you may also try to see the form of candle patterns around the S + R areas or lines for additional confirmation.
When using the methods stated earlier, begin to come up with the distance between your entry, nearest support/s and resistance/s to begin planning your trade and figuring out your risk: reward proportion.
One example is you intend on entering the market on the Usd/Jpy set at a price of 89.65, you have establish a very strong resistance at 90.00 and a very strong support at 88.60. Your entry is thirty five points from resistance and a hundred and five points from support, if you take a quick position you would have a trade with a risk: reward ratio of 3:1 that is by any guidelines a very good trade. you will most probably then want to modify this just a bit by placing your stop say 10 points above resistance with your take profit 10 points above support, you've now tremendously improved your chance of keeping your stop and price hitting your target whilst still maintaining a R2+
Hope this has helped, sorry if perhaps some of it appears as if I'm mentioning the obvious to many but many first time traders find this more challenging to grasp than it may seem, We have in the current months starting to coach trading to many rich clients and as smart as they are, they sometimes really struggle with certain concepts
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