Stop Loss Positioning and Management

In this module, we explain the many concepts, ideas, and approaches which can be applied to the topic of stop-loss positioning and management. This is a subject in its own right and one which attracts much debate and argument, but the bottom line is simple. Find what works for you and stick with it! For myself, I use the levels on the chart as my defining guide, while others will adopt a more mechanical approach. Stop loss positioning and management is more of an art than a science, something to always bear in mind at all times and there is no right or wrong way.

For example, many intraday stock traders like using indicators such as the volatility stop or the ATR percentage stop which both fall into the category of an indicator stop of which we consider several variations in this module such as ATR or Bollinger bands. All are valid and each approach has advantages and disadvantages which we explain in detail. Ultimately it is you who decides which one you consider offers the best protection in terms of risk and money management, along with ease of use.