How muc do most let a swing trad go against you?

Discussion in 'Trading' started by spinn, May 20, 2009.

  1. spinn


    I am just trying to get a feel for how far most let a swing trade on something such as the SPY go against you before you exit.

    Yes, I realize this us a very amateurish question without a good answer, but I have been using about a $1 stop, assuming that places the stop above resistance or below support, and getting stopped out by a few pennies way too often.

    So, in general, if one were hoping to swing trade a $90 stock that moves an average of $3 a day, how far away is your stop?
  2. i set my stops at 5%
  3. I am a believer that the market should define your stop. I use dynamic stops because sometimes the trade only requires a 2 dollar stop and other trades require a 90 cent stop. But regardless of the stop size you should only be risking 1 percent, 5 percent max size on each trade.
  4. How bad is your education?
  5. spinn


    Agreed.....I need to trade fewer shares when I think I need a bigger stop. On my most recent trade, I placed a $1 stop and was stopped out by 3 cents before the trade move $3.50 in my favor.

    This has happened several times in the last few weeks.