cashonly

Look at the worst case scenario if that particular trade went against you. How much could you lose while sticking to your trading plan and without your emotions kicking in to cut your losses earlier than your plan dictates? Work backward from there in terms of price of stock, trade size, entry/exit points. Use entry & exit points that make sense to THE MARKET, not to you. Just saying, I'm using a $1 stop because that's all you want to do is the wrong approach. Look at things the market is looking at... whole numbers, MA support, 52 wk hi/lo, prior day hi/lo, etc.... for your exit / entry points. Then, determine the amount you would be willing to lose in the worse case loss scenario. If it gives you a trade size so small as not worthy of trading (ie: in the extreme, think BRK.A), then move on to a different instrument. No matter how good the plan and strategy, if you're not comfortable with the loss you'd incur on a trade, and things get ugly, you're not gonna stick to your plan and that's as bad as trading with no plan at all.

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