Chris, One other question for you based on your formula. In the example you listed $400 as the max loss. Is this a per-contract loss? Thanks.
Yes that is a per contract crash stop. The formula is based on a maximum loss. In this number I also include commissions and adjust accordingly. This may or may not be the actual number based on market I am trading. i.e. NQ I would use 8-10 points $160-$200 etc. In day trading stops are closer as I monitor the action. But should things get out of hand this is how much it would stop at, hopefully.