Every time I make a trade I add and subtract my profits in my head. Whenever my stock goes up a dollar and rising, I feel smart, but when it goes down a point I feel like I made a mistake and need to exit ASAP to prevent further losses. I know that the number one rule of trading is to cut losses short and let winners run, but am I cutting my losses TOO short?...maybe if I would hold on to a loser for a little while longer it would be a winner. For example, I shorted rimm today at 85.20 and its up 2.60 at 87.80. I dont know if this is too much risk or not enough. Should I hold for another two points?, should I cover first thing tomorrow?, wait longer?... I have no idea. My question is, how do you know how much to risk? 1. Do you calculate risk/ reward by how long you're willing to hold on for? 2. Do you calculate r/r by the size of your account? 3. Do you calculate r/r by the # of shares you buy?