Thread by @MapleStax

🧵 How to trade with a Stop Loss🧵

(A THREAD)

This thread will help you identify and execute a proper Stop Loss in order to minimize losses, every trader’s biggest problem.
#ChartHashira

1. Before entering any trade, you must have a level to base risk off of. This will allow you to manage how much you are willing to risk as well as staying in the trade based on a support level. (Trading with the larger participant in the market) Without a SL you are just gambling

2. I look for strong signals of VPA/Candlestick patterns to look for areas where buyers or sellers are present. This will show up as a horizontal level where price has trouble getting through. This allows for a low risk entry. Indicators are great for following a trend.

3. I never stop out right on the support level, I look at the support as an area where I keep my stop below. This prevents you from being “wicked out” of trades only for price to rip up after. Mental or Hard stops, you must have one.

4. Should you find yourself in a winning trade, move your stop loss up to breakeven or trail it along the way so that you ensure to lock in profit as the trade goes in your favor.

5. I generally risk no more than 1% of my total port or 10-15% per position. This may vary if my plan is to scale in with feeler adds on the way down with a thesis reversal in mind.

6. You should always keep your risk based off of a support level, zone, indicator, or setup fail trigger. This prevents traders from experiencing a “Forced Realization” type of loss where the loss is so large that one must admit defeat. What was a small loss is now a blown acct.

7. Many traders take entry based on euphoria or how high/low this move can go instead of weighing the risk that is at hand. Every trade is based on probability, you must remember that no trade is certain and the possibility of loss is always present.

8. You could have a less than 50% win rate, but with great risk management you would still be very profitable. The key is to always control and keep losses small and letting your winners ride. I’ll have another thread soon on that topic.

9. The market gives endless opportunity, YOU are the one responsible for how much it takes. Why do traders cut their wins so quickly, but hold onto their losses until they’re forced to. Trading is all about longevity.

10. For the visual learners:
Second chart shows how a traders should have moved their stop loss up to prevent a winning trade from turning into a loss.

LINKS:
Daytrading Education-
Patreon.com/MapleStax
Patreon.com/MapleStax
LAST MONTH

Twitch Live Streams-
Twitch.tv/MapleStax

$QQQ $SPY $AAPL $MSFT $FB $AMD