Thanks, glad you liked it.

Also, If you are new to trading and do not know which setups carry more risk than others, I would suggest trading all setups with the same percent risk of account equity. Thank you again, I hope this helps.

Hi, sorry for the late response. It is best to keep the dollar loss constant when trading the same type of setup. For example, our best setups occur when a stock is breaking out from a strong base. We like to put size on before the base breakout and add the rest at the breakout. For this type of trade we may risk 1% of account equity. However, say in two weeks, the same stock offers a pullback entry off support at the 20-day MA, then we might only risk .5% of capital on the trade, because it is extended from the base breakout. I hope this helps, if you have any other questions please let me know. Thanks

I have one question : Should the stop loss amount be same in all the trades ? For example, if one is trading on a $100 share and has the stop loss at 3% which is $97 against an expected gain of 6% for a 1:2 risk reward ratio. But, if he is trading on a $400 stock, 3% comes down to $412 against an expected upside of 6% which is $424. Many such heavy stocks don’t move to this extent in one trading session. Moreover, one loses more money if 3% stop loss is hit on the $400 share compared to 6% gain on the smaller value stock.

So, this would disturb the risk reward ratio. How should this be handled ?

Thanks!

Hi Todd,

Thanks for the kind words.

Really happy that you are discovering the beauty of simplicity in trading. It certainly reduces the stress levels, which ultimately prevents burnout.

Appreciate your enthusiasm.

That’s true. Hard work and dedication to scan for the best stocks to buy cannot be avoided.