Sunday, March 5, 2017

Happy Sunday everyone

Happy Sunday everyone

The trading week will soon begin and I was working on my stuff today i was looking at my stop loss setting and try to improve it. So I will share with you on that!

Why use a stop loss

Using a stop loss allow you to get rid of the emotions on a particular trade. If you set it to a point of no return and it cross this point it will automatically close the position. But when the market have gap or too high volatility it can close at a different price has it can skip your stop loss.

How I use my stop loss with my money management

Each position I open had predetermined size of loss of 0.5% of the account size loss on a weekly positons and 2% of the account size on the daily positions. And I never open more than 1 position daily and 1 weekly per trading instrument to avoid too much exposure. So I always got a max 2.5% risk per position. I know it may seem a lot but I am able to deal with that kind of risk. For a beginner I would recommend a 1% stop loss of the account size.

How you can set your stop loss

Has a technical trader you can place in a lot of way. But how I place mine his base on simple moving average it is really simple to use this way. If you want to use it you can build your on stop loss tool/finder doing back testing with your strategies and see where your strategies fail and come up with a simple moving average crossing when that failure happen that could make you quit that position at that time. When you find it you’re done but it is not a one size fit all so you got to carefully back test every instrument that you want to trade!

Hope this tip help!


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