I know I have too much risk with trading if my emotions are overwhelming or I can’t sleep. I didn’t set my stop loss close enough with my latest options trade because the loss was affecting me too much.
There are three options in this type of situation, either you work on yourself mentally to be more comfortable with the risk. The easiest way for this is to understand the position more. The more you know, the more you will be comfortable. The alternative is to put a stop loss so you can lower your position exposure. The third is putting less money into the investment until you feel more comfortable.
Nothing arbitrary like investing should be taking away your sleep. Similar to a job. Life is too short of having a lack of sleep from that type of stress.