SL (Stop Loss)

### It is a structural price, not a pain threshold A stop loss is not a guess at how much you can stomach. It is the price at which the reason you took the trade no longer exists. In our system that price is never personal, it is structural: **the stop must always cover protected structure by 2 pips minimum, and preferably exactly 2.** On hybrid setups where the reward to risk still stands up, 4 pips. The rule is deliberately narrow, because the moment stop distance becomes negotiable, everything downstream of it becomes negotiable too. ### The stop sets your size, not the other way round Risk per trade is a decision you make once, as a percentage of the account. Stop distance is decided by structure. Position size is the only variable left, and its job is to make those two agree. Read that again, because it kills a common excuse. A stop is never "too tight" for your account. If the risk feels big, the *size* is wrong, not the stop. The stop is the ruler. The size is what you cut. ### The habit that does the damage Moving a stop away from price is the single most expensive habit in retail trading, and the reason has nothing to do with charts. You only ever do it at the worst possible moment: the trade is red, the level is about to break, and you are the least objective you will be all day. In that one second you convert a loss you had measured, sized and accepted into a loss with no ceiling. Worse, nothing punishes you immediately. Sometimes the market does come back, and that near miss is exactly what teaches you widening works. That is precisely what makes it lethal. Note exactly what the discipline forbids, though: it is *widening* that destroys accounts, not the stop itself. ### The mechanics that will still bite you A stop is a promise to act, not a force field. - **It becomes a market order.** The SEC is explicit that the stop price is not the guaranteed execution price, and FINRA warns that in volatile markets your fill can be significantly different from your stop price. Gaps and news releases do not respect your line. - **The spread trades against you.** MetaTrader's documentation states that a long position's stop is checked against the **Bid**, while a short position's stop is checked against the **Ask**. On a short, the ask can reach your stop while a bid-drawn candle never visibly touches it. When spreads widen around a release, a 2 pip cover can disappear into the spread alone. Brokers sell a product for this. A guaranteed stop fills at your exact level even through a gap, in exchange for a premium. IG, for example, says its guaranteed stop premium is charged only if the stop is actually triggered, though providers price this differently, so read your own broker's terms before you lean on one. Useful to know it exists, and more useful to notice *why* it exists: ordinary stops genuinely can fail to hold their price. Yours is a line in the sand, not a wall.