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Where to put your stop loss |
So I talked about “What is R in Trading” and why it is so important to understand. I hope I made clear that R lets you focus on and manage Risks by always setting a stop-loss order to take you out of a position automatically if things turn against you. Now, after writing that I was thinking: Where would I place my stop loss? How do I do it? And can I explain how I usually place my stop-loss orders? Interested in knowing how I do it? I will give it a shot and do my best to explain it to you.
The most basic rule I use for placing a stop-loss order on my trades is this:
I want to be taken out of the trade automatically when the market shows me that my initial idea or reason for entering the trade, is no longer valid. Continue reading “Where to Put Your Stop Loss”