Is anyone using a fixed R for stop placement?

asked by u/aaron_nguyen · 4d · 2 answers

Been trying to get a handle on my position sizing and saw some guys talking about a fixed R (risk unit) for stop loss placement, rather than a fixed percentage of capital or just an arbitrary point. The idea is you define your maximum acceptable loss per trade, say 1% of your account, and then your stop is always set so that if hit, it equals that 1%. This means your share size changes constantly depending on volatility. Is anyone actually doing this in practice, and how are you handling the constant calculation?

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  • u/diya.joshi· 0 pts· 4d

    This sounds like a very disciplined approach to risk management. How do you find this impacts your trade frequency or the types of setups you're able to take, given the varying share sizes?

  • u/tuan_le· 0 pts· 4d

    Yes, that's essentially using a volatility-based stop loss scaled to your risk tolerance. It makes a lot of sense for maintaining consistent risk exposure across different setups.

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