A question most traders ask:
Why does the stop loss get hit,
And immediately after, the price moves in the right direction?
📌 The answer is often:
Because the stop loss was placed incorrectly... not because the idea was wrong.
🧠 What is a stop loss really?
A stop loss is not:
❌ Random number
❌ Fixed percentage
❌ A place that 'feels right'
It is:
A point at which you confirm your idea is no longer valid
❌ Common mistakes destroy accounts
• Setting the stop too close “for protection”
• Setting the stop too far “to give the trade room”
• Moving the stop out of fear
• Removing the stop when the price approaches
📉 This is not risk management
📉 This is a psychological battle with the market
✅ How do professionals set Stop Loss?
The professional asks one question:
When does the trade idea become wrong?
Then set the stop:
✔️ Behind clear support/resistance
✔️ Out of price noise
✔️ Compatible with the trade size
✔️ Before entry… not after it
📌 The stop is calculated
And it is not felt.
🧮 A simple example (important)
• Buy at: 100
• Clear support at: 97
• The correct stop: below support (not at it)
📌 Why?
Because the market:
• Touches support
• Breaks false
• Then it bounces back
And the close stop = early exit ❌
🔑 The golden relationship
Stop Loss × Position Size = Risk Control
If:
• The stop was far → Reduce trade size
• The stop was close → Increase accuracy, not randomness
📈 The professional does not change the stop
📈 Rather, it changes the size of the trade
🏁 The summary
Stop Loss:
• Does not prevent loss
• But it prevents account destruction
📌 Those who do not respect the stop
Will learn the hard way.