If the stop loss is in the right place and the size is correct, the trade should feel manageable. It may still lose, but it should not create panic.
When a stop feels terrifying, the problem is often size, not analysis. The trader may be risking too much for the setup quality or using leverage without enough room for normal volatility.
I prefer stops that invalidate the idea, not stops that simply match the amount I wish to lose. The position size should adjust around that invalidation point.
When a stop feels terrifying, the problem is often size, not analysis. The trader may be risking too much for the setup quality or using leverage without enough room for normal volatility.
I prefer stops that invalidate the idea, not stops that simply match the amount I wish to lose. The position size should adjust around that invalidation point.
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