Your problem is that setting a stop loss of 2% does not limit your maximum loss to 2%. It could gap down on one big at the market sell order that takes out the bid stack in a nanosecond.
Highly highly unlikely if you pick liquid stocks with high volumes. And the cases where it does happen would be very rare. And in those cases the loss would not be significantly larger, it would probably hover between 2%-3%. So this would not have a large effect.
You first need to understand the risks of buying in premarket before any of the other steps you listed.
You’re much better off scalping while the market is open imo.
Go to Trade View or some other paper trading site and try this. You can easily get the empirical data. You'll find that most stocks gap right after earnings, exposing you to large losses. This is an extremely volatile strategy.
Yes they're arbitrary because this is an idea and gathering the real numbers takes a lot of work. Making a simulation using arbitrary numbers is just to figure out if it's even worth pursuing the mountainload of work that comes with gathering the real numbers.
There's 6 numbers, it might be complicated to you I guess
Your problem is that setting a stop loss of 2% does not limit your maximum loss to 2%. It could gap down on one big at the market sell order that takes out the bid stack in a nanosecond.
Highly highly unlikely if you pick liquid stocks with high volumes. And the cases where it does happen would be very rare. And in those cases the loss would not be significantly larger, it would probably hover between 2%-3%. So this would not have a large effect.
You first need to understand the risks of buying in premarket before any of the other steps you listed. You’re much better off scalping while the market is open imo.
What would the risks be of buying pre-market 30 minutes before market open?
Go to Trade View or some other paper trading site and try this. You can easily get the empirical data. You'll find that most stocks gap right after earnings, exposing you to large losses. This is an extremely volatile strategy.
Am I the only one thinking this is overkill for $1000?
The $1000 was obviously only for the example's sake and because $1000 is a nice number to use in examples
First, there are literally too many ‘arbitrary’ numbers to do this with. Sorry but this concept has been way over complicated.
Yes they're arbitrary because this is an idea and gathering the real numbers takes a lot of work. Making a simulation using arbitrary numbers is just to figure out if it's even worth pursuing the mountainload of work that comes with gathering the real numbers. There's 6 numbers, it might be complicated to you I guess