Further Reduction of R Loss Per Trade
I have lots of consideration about this 'end of day' manual stop loss idea when I come across MisterLowRisk sharing it a few months. Here's an additional tactic I’d apply if I were in the U.S. or Europe, though time zone constraints prevent me from doing it:
I would close any position with an unrealized loss right before the market closes (i.e., if it’s trading below the entry price, especially when that entry was based on a range breakout). If the trade hasn’t shown traction by day’s end, this approach can give an edge by further reducing R loss. It’s best done near the end of the day to allow the full day range to play out—since a last-hour rally could lift the position if it's below the average price earlier in the day.
One downside you need to accept is re-entering an idea on higher entry based on prior day high (again, this is range breakout on RVOL basis), and you may have a ultimate stop that's marginally higher than prior day low. The flipside of this is you accept that you are able to scrutinize trade losing traction before any potential gap down open on the following day, further reducing downside risk on each individual new position. There's also consideration of unlocking capital to free up capital access for new/better ideas popping up the next few sessions.
In conclusion, I really like the idea of not holding newly executed losing positions overnight as a swing trader, and I think many of you in the U.S. and Europe should consider exploring this approach.
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