"Positions established must be reduced and removed until or unless the market proves the position correct" - Phantom of the Pits. If you are struggling with stop placement this is a rule to live by. Don't wait for the market to prove your position wrong! If the position isn't correct get out with a small loss or small gain. It doesn't matter whether you are day trading, swing trading or position trading this rule will help you keep your loses minimal. I always have a hard stop in as a backup (more of an emergency stop) and would only not constitute a significant loss if the market runs against me.
Here is a thought for the devotees to this thread. Some Posters are adamant that stops should be outside the 'noise' Does this mean that they wish to have a change of trend take out their stop. regards f9
noise is a good thing, forex has less noise and trends well, but that means when you're on the wrong side of the trend and large stop you lose out. In example S&P futures trends less, so when you're on the wrong side it's easy to correct your losses
I don't know what noise is quite frankly. I do know that one man's noise is another man's Ferrari. regards f9
It's "noise" if price doesn't hit your stop, and you profit. It's a "spike" if your stop is taken out, you blame the broker and lose a couple $.