Deciding my stop before I look at the chart for the entry, not after

[Fairman]

Deciding my stop before I look at the chart for the entry, not after

I used to find my entry first and then decide where to put the stop. The problem was that the stop ended up wherever was convenient, often too close because I wanted a better reward to risk, or too far because I didn't want to be wrong.

Now I do it the other way around. The first thing I decide is where the trade is wrong, meaning the price that tells me the idea has failed. That comes from the structure, not from what I'd like. Then I look at the entry, and calculate the size from the distance between them. If the distance is too big for my risk or the target isn't worth it, I skip.

It changed the quality of my trades. The stops are in logical places now, beyond something meaningful, and I'm not nudging them to fit a story. When a stop gets hit, it's because the idea was wrong, and not because I placed it badly.

It also made me skip a lot of trades that I'd have taken before, where the only way to make the numbers work was by using a stop that didn't make sense.

[Fairman]

This was a big one for me too. Once the stop comes first, the position size becomes the thing that adjusts, not the stop. A wide stop means a smaller lot, a tight one means a bigger lot, and the money risked stays the same. Before, I kept the lot size fixed and squeezed the stop to fit, which is the worst way round. It took me a while to accept that a good setup with a wide logical stop is still a good setup, just with a smaller position.

[Fairman]

The part about skipping trades is underrated. When the logical stop is so far away that the target no longer makes sense, the honest answer is that there is no trade. I used to try and make it work by finding a closer stop that had no meaning. Those trades got stopped out by normal noise all the time. Now if the structure does not give me a sensible stop with a reasonable target, I let it go and wait for the next one.