Where to set stop loss

2x the ATR. Adjust as volatility changes.

Also consider the nearest support/resistance for feasibility.

Insure the target is within reach with an above 0 r/r. Don't gamble a buck to make a quarter.

I think it also depends on how your risk profile looks like. I use different TA indicators, like support and resistance, 10, 20, 50, 200 MA, Bollinger Bands etc..
Don't set your stop loss right at those indicators otherwise your order gets triggered more likely since everyone else sets their stops right at these levels. I always choose to set it a nickel or a dime below those levels (depending on the share price).

Also one of my rules are, that once I am in the green with a trade, I will NEVER allow this trade to turn into a loss. I set my stops/limit orders accordingly.

Stop losses are set completely dependent on how much you feel comfortable risking in any given trade. I usually need at least 3:1 risk reward to put on a trade so my stop will usually be set 1/3 the distance to my target price. In addition, some other key points that may be useful:

-Don't set stops right at obvious support/resistance, you need to give it some room to breath, the floor traders love to push it to these levels to get the orders to go off and then reverse the other way.

-Usually stops will be set too tight, you need to be absolutely sure your stops are in line with the volatility of whatever you are trading.

-Don't ever start widening your stops unless you see something really obvious that makes you want to do so, this is one of the common pitfalls of new traders that can lead to major losses.

yoyomama said: ↑
How do you insure that...seems you'd have to set up a stop or trailing stop at something like .01 as soon as your trade gets into the green?
i've had trouble with this too. i understand the reason not to let a winning trade turn negative, but i've also lost out on big moves because i tightened my stop to a break even point prematurely.

i don't have a good system in place for this. seems like you still need to give the trade enough room to breath and move in your direction. would be interested in hearing how people handle this. just exit if it goes negative automatically and re-enter the trade again if it still looks promising?

Yeah, I started this thread because I am new and decided I would set the initial stop/loss at 10% loss from where I bought in. Well, I had one go into the green by 9% so I moved the stop/loss up to my break even point and it bounced down for about an hour, hit my stop/loss and then proceded to go up another 4% in the same day. I didn't loose anything, but now I have to decide what to do with the money now.

Thanks for the help