Here’s how advisors incorporate stop losses into Riskalyze analysis.
Click on the investment(s) you have set stop losses for. In this example, we'll use SPY.
You'll see a risk/reward scenario section with a 6-month worst-case return and 6-month best-case return.
Step 1: Enter the stop loss in the 6-month worst case return.
Step 2: Decrease the 6-month best-case return by the same factor.
Example: Let's assume you have a stop loss of -10% for your investment.
Enter -10% as the worst-case input. This reduces the amount of potential downside by approximately 39% (downside reduction from -16.57% to -10% = 39.65% reduction in probable downside).
The upside will need to be reduced by a proportional amount. Reducing the upside of 26.95% by 39.65% would equal 16.26%.
You would enter this as your "Best Case", then hit SAVE.
That's all there is to it!