Protecting the higher low: where stops belong in a trend continuation

[Shadow Trader]

In an uptrend, the last higher low is the level that, if broken with a close, would turn the structure. So it seems natural to put stops just below it. The problem is that this level is also the most visible, so it is often swept before price continues. My approach is to separate invalidation from placement. Invalidation is the close below the higher low on the trading timeframe. Placement is where I physically put the stop to survive normal noise, usually below the sweep zone with a buffer. If the position size would be too large with that wider stop, I reduce size rather than tighten the stop. I also avoid adding to winners right at the higher low, because that is where reversals begin. I add only after a new break confirms the trend is still intact. This keeps risk consistent and avoids the cycle of being stopped out by a wick right before the move that you predicted.