Opinions on best way to set a stop-loss

I would be interested to hear opinions on the best way to set a stop loss. There are so many methods. I got stopped out on 2 trades yesterday. One has already rebounded somewhat. I’m considering going back to sticky-note stop-loss, but I can’t stay by the computer all day.

Market volatility often trips a stop loss soon after its in place. And often well below market. Best to avoid them.

Not a good idea until stock is up at least 10%. And then better to sell part at market to reduce risk.


Stop orders are traders’ tools, not investors’ tools. My broker advised to use only mental stop orders.

The Captain


My practice on stop losses has been to actually use them to protect gains.

For example, I SHOULD have used one on UPST last week when the sell off started. I should have used it to protect the majority of my massive YTD gains. When they trigger, I am completely OK with that as I have booked a gain. I don’t second guess what they do after I sell any more than I would second guess when I sell at market.

I never use them to protect from a “loss” especially if I am at all concerned with what the stock does after I am out.

Set them at a price where you would be happy taking PROFITS and forget about them (or even better, if your broker allows, set that at X% of the current price and let the stop loss amoun grow as the stock does).


Hi @Hawkwin,

If a trade is running longer than I expected, I set a GTC trailing sell. Normally between 4% and 10% depending on the volatility. I set these in the second week or later.

I believe I have only done a dozen or so of these …

All holdings and some statistics on my Fool profile page
https://discussion.fool.com/u/gdett2/activity (Click Expand)


Thank you all! This is good info to help me develop a better plan!

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