Stop Loss levels

However a lower profit level is more achievable but if for example I had 4:1 on a week and that was the minimum I required that is putting a lot of pressure on my stock-picking.

The lower the stop-loss the greater likelihood it will get triggered.  The higher it is the less likelihood but a greater loss will be sustained if it does get triggered.  Also even when it does not get triggered the loss itself is still sustained.  But against that the higher the percentage requirement the less likely it will get realized, the lower the more likely.  I want to increase the number of profitable trades whilst reducing the losses on the inevitable losing trades - whilst keeping the number of losing trades as low as I am able.  The latter is solely about my stock-picking skills, the former is about managing entries and exits.  The former can be made more efficient and effective by stop orders though the entry points also need to be more mindful of the previous day's trading levels.

I need a balance between reducing loss amounts whilst not triggering too many stop losses e.g. where the share is triggered then bounces back up.  I will make wrong selections regularly so should formalize the loss level and relate it to my profit requirement.  I could even change it based on my recent profit performance e.g. last 10 trades.  Stop loss though does not allow for a neutral outcome - either I will achieve profit or loss.  A neutral or minor loss e.g. £20 for trade would not impact my profits in a significant way.  Neutrals can be triggered when the stock is in profit but is not going to meet the percentage requirement then I exit as high as I can above the buy price.  Trailing stops help here as lock in profit as it is made.  A trailing stop and a stop loss mean I don't need to watch the market - as if the price rises profit will be taken, if it falls loss will be minimized.  I then only need to watch last 90 minutes or so of the day where neither outcome has been triggered and exit myself between those two ranges.  As the books say I don't then have to second-guess minute by minute market movement and remove emotions such as fear and greed from the equation.  This is something better to see on a live account but I can replicate on paper by entering the entry and exit levels as I do on Money but always keeping to them - and for the trailing stop can replicate by sticking with a share when it passes my level but automatically sells as soon as it falls a percentage back.

If trading a third of my account on any given stock then my requirement will equal the stop loss - as I am working towards more winning trades than losses does that matter?  Could increase the profit requirement to adjust for slippage, changing performance, relation to stop-loss - but that can be developed over time.  Stop loss could be reduced to 0.9% for example - do advise best not to go for 1%...I could adjust percentages to deal with situation when had 3 profits for 2 losses so that those weeks are profitable too?  You could make stop losses so low they are almost neutral but then also reduce the number of profits in a week.  I think that is better than trying to make 3:2 scenario profitable as in effect that is trying to make the surplus 1 profitable trade per week profitable over the week which is very unrealistic.  Whereas take neutrals or marginal losses then 2 wins over the week can end profitable let alone 3.  Simply don't entertain losses - zero tolerance - you lose you out of here!!  You have to allow some drop though for the general up and down of buy and sell but as said as low as possible.

If stop-loss considered too tight in terms of points I have the option of increasing the stop-loss and reducing the traded amount accordingly e.g. if double stop-loss point then halve trading amount, this then ensures the stop-loss as a percentage of my overall account is not breached.  Alternative is to avoid trades where I would need to do this.

Will revisit profit to stop loss ratio based on experience - that is towards increasing profit level and reducing stop-loss level - with more room obviously for improvement on the profit side.

Could also set level based on how stock usually fluctuates e.g. if usually fluctuates 5% no point setting stop loss to 4%.

Will now give consideration to setting stop-loss based not on a rigid percentage or sterling amount but based on the likely volatility of that stock based on previous days performance.  To be decided how many trading days this to reduce triggers from market-noise but will still be based on reducing losses.  So for example 1% of overall trading account could be the outer level but I may go tighter than that if I believe the stock should not fluctuate that far.  As a novice trader I will to begin with start with a conservative overall stop-loss level but if successful then I would look to bring that in up to 3% possibly even 4%.  I also need to be mindful of my profit percentage requirement as if stop loss larger than that then this also could impact overall profitability.