Ask Colin

Do you take your stop-loss from the close of the day or the low?

From the low.

The reason I do this is because I am trading the trend. My stop loss is at the point where the trend fails.

An up trend must make higher troughs, or it has failed. My stop-loss is therefore under the last trough in the trend.

The trough is made by the low, not the close.

Of course, sometimes the stop-loss is hit and the trend re-asserts itself. Then, I have to consider buying back into it.

There are other ways to set stop-losses, with their own logic, but this is what I do.

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