A trader explains why tight stop losses backfire: set them near the session high, not the low, to let trades breathe. Use position sizing based on chart signals instead of fixed dollar amounts, and let the market invalidate your trade, not your emotions.
People always talk about where should my stop loss be? First of all, let's talk about your target. What's going to be your target? It's going to be your current low that was created in our New York session. This is going to be your 9:30 AM low. Your stop loss, I always say, should be at the high or near the high because we can tap back into this area here and still respect the bearish PD arrays, right? So for me, I always try to have a wider stop loss to let my trades breathe. I'm a huge believer in letting your trades breathe. People have too tight stop losses. They get stopped out for 20 points and it goes in direction. Let the chart do the invalidating, not your P&L. And this is where you need to fixate on. Sizing down, not worrying about the dollar amount, and actually worrying about what the chart is telling you.
