Best Stop Loss and Take Profit for SPY Intraday Trading (Backtested)
Choosing the right stop loss and take profit levels is one of the most important, and most difficult, decisions in intraday trading.
Set them too tight, and trades are closed before they have time to develop. Set them too wide, and losses can quickly outweigh gains.
On this page, we look at how different stop loss and take profit combinations perform when applied to the S&P 500, using SPDR S&P 500 ETF (SPY) as the underlying data source, based on a full 12 months of historical intraday data.
Why stop loss and take profit matter
In any intraday strategy, outcomes are largely driven by how trades are exited.
Two traders using the same entry point can produce completely different results depending on how far their stop loss is set, how aggressively they take profit, and how consistently those rules are applied.
Small changes in these settings can have a significant impact on overall performance.
How the data is tested
To understand what works best, a wide range of stop loss and take profit combinations are tested using historical SPY data.
- Stop loss and take profit levels are tested from 5 to 100 points
- All combinations are evaluated systematically
- Results are analysed over a rolling 12-month (260 trading day) period
- The strategy assumes trades are opened at the same time each day and closed either at stop, limit, or market close
This approach helps identify which combinations have performed most consistently over time.
Key insights from the data
There is no single perfect stop loss and take profit combination that works in all market conditions.
However, the data shows that:
- Certain ranges consistently outperform others over time
- Very tight stops tend to result in frequent small losses
- Very wide stops can lead to larger drawdowns
- Performance is highly sensitive to even small adjustments in levels
Most importantly, the optimal settings change over time, which means a static approach is unlikely to remain effective.
Why a rolling 12-month view matters
Markets are not static. A strategy that worked well 12 months ago may not perform the same way today.
By analysing a rolling 12-month window, recent market conditions are always reflected, outdated data is gradually removed, and the results remain more relevant to current behaviour.
This provides a more realistic view of how a strategy is currently performing.
Applying This in Practice
If you are trading an intraday strategy on the S&P 500, the key takeaway is simple:
- Stop loss and take profit settings should not be fixed indefinitely
- Regular re-evaluation based on recent data is essential
- Small parameter changes can materially impact results
Rather than relying on guesswork, using data-driven optimisation can help improve consistency.
See the latest optimised settings
Market conditions evolve continuously. Twintraday provides daily updated analysis of the best-performing stop loss and take profit combinations, based on the most recent 12 months of data.
View latest analysis