Category Archives: Trading

Where to Put Your Stop Loss

Where to put your stop loss
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taken out of the trade automatically when the market shows me that my initial idea or reason for entering the trade, is no longer valid.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