Setting stops is essential and yet so very tricky. Hard stop? Mental stop? Trail stop? And How far below? Use fixed point or percentage? We also have to consider how thinly traded the given stock is.
Today I was trading LNG and the stops didn’t work quite for me.
After getting in position in the morning and the price going my way, I set a 1.5% trailing stop. It got triggered during a stop run that resulted in a long tail hammer candle. LNG rallied for another 4% before any correction.
After the stock flagged for an hour and a half, I entered a long on a volume surge. It went on and broke out and I proactively took profit. As the resistance-turned-support got tested successfully, I re-entered and a hard stop 5 cents below the horizontal support. I once again got stopped out on a brief dip below before the price continued higher into high of day. I guess I should set a looser stop on LNG?!
Two days ago I also had an aggravating episode of stop woe. I entered 1000 shares of GRS. After taking a proactive profit on half the position, I set a hard stop, which turned out to be low of day 10 minutes before close. Worse of all, the stock gapped up the next day and rallied 3.8%!!