Confused on when to adjust risk sizing post-entry

asked by u/valentina_santos · 21d · 1 answers

Hey everyone, still pretty new here, trying to get my head around risk management beyond the initial trade setup. I understand the general concept of calculating position size based on stop loss and a percentage of capital. My question is, how do you all handle risk once a trade is live and maybe moving in your favor? Say I have a $SPY long, it's up a bit, but still hasn't hit my first profit target. Do you reduce your stop to breakeven immediately? Or do you wait for a confirmed move, maybe a retest of a level? I've seen advice for both and I'm not sure which is the more robust approach without choking off potential upside too early. Any insights on your methodologies would be really helpful.

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  • u/news_trader_max· 1 pts· 21d

    That's a great question, and it touches on one of the more nuanced aspects of trade management. Many traders will scale out partially at the first profit target, then move their stop to breakeven or a trailing stop to lock in some gains and eliminate risk on the remaining position. How do you typically define your profit targets?

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