How to price stop-losses
This week is all about algo trading.
I happen to think most stop-losses are set arbitrarily at magical positions.
So far I've gotten away with not having stop-losses with my trading bot Windfall. I did so knowingly having capital locked up with unsold inventories, not able to deploy them for new profit opportunities.
But this is done so with the excuse that if stops are placed wrong losses will incur more than profit.
I wonder what approach is best for coming with target stop-loss prices in such a way that I end up statistically on top.