It depends on a trader’s personal risk preference, money management technique, and price availability, but as long as the difference between a buy order and stop level does not exceed 40 percent of the average daily trading range, a profit target can be set in advance. For example, a long trade could always be opened automatically using a limit order placed 25 to 35 percent of the average daily trading range above the stop level.
The time window for opening the initial position can be shifted. For the most part, however, the earlier in the day, the safer the trade.
A position reversal, if appropriate, can be executed simultaneously with the initial stop-loss order or after a retracement back into the intraday range.
The profit target can also be chosen in advance. For example, profits could be taken after a completion of 80 to 90 percent of the average daily trading range. However, if the desired level has not been reached before the end of the day, the position should be liquidated at the close.
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