RE: Stop Loss Positioning Guide
(2016-08-05, 08:56 PM)odlareg Wrote: Btw, now I'm also thinking to another possible strategy. I'm refining my Money Management, and I think that I will introduce a rule, according to which only a defined part of the portfolio can be exposed. For instance, all the existent positions together cannot expose the portfolio to more than 5% of loss. That means that when I enter some positions, I need to wait some times, and only when those positions are "positevely" protected (= the stop loss is over my entry point) I can open new positions.
I do exactly that.
I recently introduced such rules when refining my own Money management system. I also use 5% max risk of the portfolio. It limits the danger, by forcing me to enter only progressively in new position.
It's specially a good way to deal with the fact that the market analysis can be wrong. Only if market analysis reveal to be correct and the new positions become winning (and protected) I can open new positions.