In my sixth lesson for this series on swing trading, I explain where to place your initial protective stops when you enter a trade. The initial protective stop is more an art than a science.  If the stop is too tight, you can pretty much guarantee a loss, because the noise alone will take you out of your trade.  If the stop is too loose, you will increase your changes of a winning trade, but you will lose more if you are wrong.  Watch my trading lesson for an in-depth explanation.

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Dave Landry is a President of Sentive Trading, a money management and research firm, and a Principal of Harvest Capital Management, a hedge fund. Mr. Landry can be contacted at dave@davelandry.com.