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How do you set your stop loss when a stock is up 3R?

I never move my stop loss at all. If you mean the 2.6R base profit lock-in, well I exit the trade when the risk-muliple drops back to 2.6R! Here one can remove the initial stop loss and set a stop loss order at the 2.6R level. Read more about the 2.6R base profit lock-in technique.

The R aka [Initial risk %] never changes in a trade! It’s your psychological anchor as it represents the risk your took when you opened the trade back in the heat of the moment. A very important tracking parameter.

Risk-multiple = [Profit/Loss %] divided by [Initial risk %]

As the [Initial risk %] never changes it’s only the current [Profit/Loss %] which determines the risk-multiple.

Both parameters [Profit/Loss %] and [Initial risk %] are measured as % of the account balance when the trade was opened back in time! You need to track or write down the initial risk % and the account balance when the trade was opened! More about this in my definite money management article.

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