Ask Colin

Is your stop-loss always 2% below the last support level?

While 2% is a good guideline, I do not have hard and fast rules, because every case can be subtly different. For instance, rigid rules like always and exactly 2% would sometimes be a round number. Round numbers are often support levels, so I would put the stop below the round number.

In another case, the support level may have been tested many times and very exactly each time - say if a big buyer is always soaking up all supply at a price. In that case I might put my stop just below that level and much less than 2% below it. If the big buyer is finished and the price falls below his/her price, then something important has changed.

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