Position Sizing

Position sizing is explicitly outside the scope of this framework, but its relationship to stop placement is addressed directly. When the mechanical wrong point is far from entry, the correct response is not to move the stop closer — it is to reduce the position size. A smaller position at the mechanical wrong point has the same maximum dollar loss as a larger position at a closer arbitrary stop, but the smaller position lets the structure breathe. Moving the stop instead increases the probability of being stopped out by normal counter-movement within a valid structure. Structure defines the stop. Position size manages the risk. They are separate decisions and must stay that way.