I’m day trading SPY and previously thought that creating a stop loss at -30% of my trade was a sensible risk.
However, I’m often then removing my stop loss with the conviction of being directionally correct and exposing myself. Often I’m correct but when I’m not, my account is blown.
Do I need to give my trades more breathing room e.g -40%?
Usually my trades are correct. Roughy 80% of the time and my upside is often +40% or more.
Posted by OutlandishnessNo3675
3 Comments
Don’t use a stop. Decrease your trade position size to what your stop would’ve been
The rule of thumb I always use when trading options is your position size is your amount risked. And I tend to keep both to 1-2% per trade. For day trades anyway.
You shouldn’t arbitrarily set a stop loss at a specific % or $ amount. You need to base your stop loss in relation to the setup
Some setups may give you a -15% loss, some -35%, some others -20%, etc
If the chart got you in, the chart needs to take you out as well. Let me know if this makes sense