Dan Zanger's Rules for Setting Stop-Losses on Breakouts

The Non-Negotiable Stop-Loss

In the world of high-momentum breakout trading, a stop-loss is not optional. It is a matter of survival. Dan Zanger is ruthless when it comes to cutting losses. His rule is simple: if a breakout fails, he is out. He typically places his initial stop-loss just below the breakout point. If the stock closes below this level, he sells without hesitation. This disciplined approach to risk management is what has allowed him to survive and thrive in the volatile world of trading.