In these years of trading contracts, I’ve made the most mistakes when it comes to stop-loss. In the early days, I was used to using a fixed percentage—for example, placing a stop loss 3% below the entry price. But I often got taken out by a single wick; meanwhile, my direction was actually correct. Later, I gradually shifted to reading the structure: before entering, I’d first identify the previous low, key support, or a pattern’s neckline, then place the stop loss at the point where the structure breaks, and only then work backward to determine the position size. Percentages are just a helper—structure is the basis.
For a contract like one that rallies on heavy volume—something like $ARB —if you chase in and still use a dead-fixed-percentage stop loss, it’s very easy to be shaken out by normal volatility. The bottom line is: a stop loss doesn’t have to be tighter; it should be placed where the “logic of this trade is truly wrong.”
Do you usually set stop losses by a fixed percentage, or by key structural levels? Let’s discuss it in the comments, and feel free to follow my live trading as well 🙌
For a contract like one that rallies on heavy volume—something like $ARB —if you chase in and still use a dead-fixed-percentage stop loss, it’s very easy to be shaken out by normal volatility. The bottom line is: a stop loss doesn’t have to be tighter; it should be placed where the “logic of this trade is truly wrong.”
Do you usually set stop losses by a fixed percentage, or by key structural levels? Let’s discuss it in the comments, and feel free to follow my live trading as well 🙌