Remember: A stop loss is the price where your trade becomes invalid!
Other Stop Loss Strategies
Average true Range Indicator (ATR)
Use 2-3x the ATR and subtract it from the price of your entry. For a short position, add 2-3x the ATR to your price of entry.
A trend line that has been tested multiple times and adhered to is a great place to utilize a stop loss. Place your stop a few percent or less below the trend line.
Use a 10, 20 or 50 MA as a stop loss level, placing your stop a few percent below.
Place a stop 3-5% below the breakout level.
A common tool for algorithmic traders, stop loss is placed 5-10% below entry.
Pro Tip: Keep it simple. Choose one system for your stop loss to avoid confusion- and always use it.
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