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Stop loss management after trade entry

QuestionsCategory: QuestionsStop loss management after trade entry
tjbrune asked 2 years ago
Hi Pat, I have short question about stop loss management the day after I entered the trade. As I'm working during daytime I used successfully your entry strategy with contingent sell stop. Thanks for that. Now when return home, I'm in in some trades with very small profit (as stock moved in my direction).  In past trades I did move my stop loss up to breakeven after 3-4 days to give the stock some "wiggle" room for small pullbacks. But I'm wondering if this is really necessary. Instead, would it be better strategy to move the stop to break even after the close on the day I entered the trade ? Or should I consider the type of bar, e.g. a tail bar, to leave some room ?   As always grateful for your precious feedback. Best Regards, TJ  
2 Answers
Avatar photoOwen Staff answered 2 years ago

Hi TJ,
Pat made this video for you...

tjbrune answered 2 years ago
Thanks Owen and Pat for your answer. Does 1-2 points mean 1-2 Cents or 1-2 $ ?
Avatar photoOwen Staff replied 2 years ago

A point is a dollar. Or, in some cases, a point is a percentage point.

Curtis Arias-Carpenter replied 2 years ago

I have a similar style as I work during the entire market hours. I add an initial sell limit order for 1/3 or 1/4 at a point I think it may run to like 2-4 risk units or previous nearby support. Then I get the sell alert and will adjust my orders based on price midday if necessary. I have had good luck moving the stop to break even or better at that point, though I try to leave it under the 21ma.

tjbrune replied 2 years ago

Thanks for your comment and feedback, Curtis. What I’m currently doing is, that I leave my original stop loss for 50% of my position for 4-5 days. However for the other half of my position, I trail a stop loss below the low of the current day’s candle. So I won’t loose a full risk unit in case of reversal. I might try your approach out, especially the sell limit order, so I can catch some of the up move if it’s there.