Is any rule or limit for stop loss like 2%, 3% ot 5-10 % or any stratigy for stop loss

General
2

Hi there is no rule of thumb to setting stop loss, it depends on your risk appetite, however institutional traders usually abide by certain money management principles … for example,

  1. Traders are not allowed to risk more than 2% on any trade.

  2. At any given time they cannot have more then 6% risk on their portfolio.

If they blow 6% of capital then they are not allowed to trade for the rest of the month, and if they keep blowing 6% on a monthly basis, obviously they are asked to leave :slight_smile:

Regarding a good strategy, using a trailing stop loss could be very helpful to protect your capital and potential profits.

Also most traders just look for big profits immediately and over leverage their account account, which can be disastrous in a volatile trading day. Do focus on making good trades and not just counting the money. If you make good trades, money will follow. :slight_smile:

You trades should be prioritized something like this…

  1. CAPITAL PRESERVATION
  2. STEADY GROWTH
  3. HIGH PROFITS

(usually we go for the 3rd option first and blow our accounts)

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3

Hi,

Could you guide or point me to best money management principle training/document/etc., or any institute which is educating about money management? Shukriya.