One of these days I am gonna write a summary on my shorting experience. But regarding setting a stop-loss, you have to practice this and see if you can do it. It is not easy since you might lose 80% of the time just because of short-term volatility. That means you have to make really good gains on the winners, which is not easy either in an inflationary environment. If you miss your stop and it goes against you, where do you pull the trigger? At 5%, 10%, 20%, 50%? I for one am completely useless in that regard as I have proven to never cover unless I admit that my fundamental analysis was wrong. And that’s a guy talking who shorted TOL years ago at $25 and again at $40 just to see it go to $50. I guess I finally made some money now, but this was not for the faint of heart.
