Four decisions, one stop
You already know where the stop goes. What you do not have is the order, and the order is what keeps your hand still.
Then the bar breaks and you widen it.
You widen it because being wrong at that price would be final, and moving the line down keeps the question open for one more bar. Then another one. The chart had nothing to do with it.
You could have written the rule yourself, and you probably have, in a plan you still have saved somewhere. This guide picks up where that rule stops.
What you walk away knowing
Two numbers, decided while the market is closed
The most one trade is allowed to cost you, and the second number that falls out of the first without you having to think about it again.
Three ways to place the first stop
Each one belongs to a situation you can see before you enter. Pick the wrong one and you end up in a position you have to argue with, which is where the widening starts.
The one moment the line is allowed to move
The right to move a stop has a definition, and two things have to happen first, in order. Comfort is not one of them.
What to do when the stop was right and the market took you anyway
It will happen this week. There are two ways to handle it, and the one that fits depends on how you trade.
Who this is for
It is for you if
- You know where the stop goes and you move it anyway.
- Your losers come out bigger than your plan said they would be.
- You have widened a stop this month and told yourself it was the chart.
- You trade real money and want the decision made before the open, not during it.
It is not for you if
- You are looking for entry signals. This one is about protection.
- You have never placed a stop at all. Start somewhere earlier.
- You want a system that removes the decision. This one tells you how to make it.
The next widened stop is already on its way.
Two numbers tonight, one placement, one adjustment. Four decisions, and a single line comes out of them.
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