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This is a very important subject that many traders struggle with, where should you place your initial stop loss?
Well unfortunately there is no definitive answer, but if you are looking to trade from strong confluences of support and resistance you can reasonably expect the price to react from those confluence with very little drawdown meaning that your stop loss can be relatively small especially when compared to your potential profit targets.
For a start, your stop loss should NEVER be larger than the profit you are aiming to achieve, i.e. if you are aiming for 10 pips profit you should not be risking 30 pips on your stop loss.
Once you see a nice set up with a positive risk/Reward which I would recommend is equal to or more than 1:2 you can safely use a stop loss of between 30 and 50 pips.
I personally never go above or below this range but it really does depend on what kind of confluences you are looking to trade from.
For example, if you are day trading, this range is certainly plenty for you to be using but if you are looking at higher timeframe confluences such as the daily and weekly charts maybe you would probably need a much larger stop loss but the positive thing is that your take profit levels are much higher too.
In summary I would recommend that for normal trading you stay within the 30 to 50 pip range for your initial stop loss.
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