Your stop loss is not a risk setting. It is a noise threshold.
If your stop sits closer to entry than the asset's average daily range, you are not managing risk. You are paying to be removed from trades you were right about.
The correct order is: place the stop where the idea is invalid, then size the position so that loss is acceptable. Most people do the reverse. They pick the size they want first and put the stop wherever it fits.
Where do you actually put your stops?
If your stop sits closer to entry than the asset's average daily range, you are not managing risk. You are paying to be removed from trades you were right about.
The correct order is: place the stop where the idea is invalid, then size the position so that loss is acceptable. Most people do the reverse. They pick the size they want first and put the stop wherever it fits.
Where do you actually put your stops?
A fixed % from entry
0%
Structure, then size to fit
0%
An ATR multiple
0%
The liquidation price
0%
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