Which Stop Loss Type is Best? Points-Based, Percentage-Based, or Fixed Amount?

Trading
1

Every trader uses Stop Loss (SL) differently, but there are 3 main types:
Points-Based SL– Set SL at a fixed number of points (e.g., 50 points below entry).
Percentage-Based SL– Risk a % of your capital (e.g., 2% SL on every trade).
Fixed Amount SL – Decide exactly how much money you want to risk per trade (e.g., ₹1,000 per trade).

Which method do you guys prefer? I personally find Percentage-Based SL the most consistent, but some traders prefer Fixed Amount SL for better risk control.

I found a tool that calculates all three types of SL automatically > SLTPCalculator.com. Thought it might be useful! Would love to hear your opinions on which SL method works best for different market conditions. thanks.

1 Like
2

I think your stop-loss should be dynamic instead of static, meaning it should adjust over time. Personally, I’m not a big fan of fixed stop-losses.

1 Like
3

It completely depends on your trading system. I suggest back test all and then chose the that u feel is the best for you.

I, personally, use Fixed amount SL. The amount is 3% of my capital. I’m an option buyer, I keep 50% of buy point as SL and position size accordingly. It’s working for me.

1 Like