Where to place stop lossDefine and use your stop loss order for every trade you open!! Immediately after you have found good opportunity for trade setup by your scanner and after you defined your entry point , you must set your stop loss point. This value have to fit with your maximum risk for trade you have defined in your stock trading strategy . You have to set your stop loss level before you are going to set you target! Stop loss level has to be set under logical support or above resistance level. If you have swing trading system then your stop loss level should be closer to your entry point then for position trading system. Stock setup for day trading system must have very small distance between entry point and stop loss level. Here is example of setting stop loss level for
pullback
trade type:
Stop loss for breakout trade type has not to be very far from broken support or resistance level. This will protect you in case of failed break. You can use same values as you could use for define entry point . You can also use charts of lower , intraday time frame. 60minute chart or 4hour charts can be used to find some good intraday support or resistance level for placing stops.
Return from Setting of stop loss back to Stock trading system
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