Chapter 4 of How To Make Money Trading Stocks (located in your membership area), it will go into detail about stop losses. Page 82 of the book will teach you how to adjust your stop loss. Page 85 will give you a check-list of how to set your trailing stop.
“A stop loss is a predetermined price at which a losing trade will be closed. A stop loss can be thought of as a mental strategy where you are mentally aware that it is time to exit a loss in trade once it hits a certain price. It can also be considered a physical strategy where a stop loss order can be placed after the trade is entered and sits on your broker's books until the stop order is either triggered or canceled.
The strategy of using a predetermined price to exit a losing trade is fundamental. Setting a minimum value of a stock and giving this information to your broker in advance will certainly mitigate your trade losses. Therefore, using a stop loss is essential to effective practices. The first stop location should be the most recent low on the chart before the Buy signal is given. For bear market stop losses, you should raise your stop to the lowest low price of the most recent hold signal. We recommend a trailing stop of 8-10% but this can vary depending on the volatility of the stock traded. Trailing stop losses are recommended." The chapter continues to talk about the different formulas for stops:
-The Money Stop Formula
-The percent Stop Formula
-The Time Stop Strategy
-Avoiding Typical Emotional Cycles of Buy and Selling
-How and why to Enter and Exit the Market
-Adjusting Stops when Trades are Losers
-When to Get Out of a Losing Position
We recommend using the book as a tool to help further your education in using the system. There is a search bar located within the book to help you find and access key words quickly and efficiently.