Stop Placement

Stop placement in this framework is not a creative decision. The stop goes at the mechanical wrong point, full stop. An arbitrary stop — based on pip distance, account percentage, or a level that looks reasonable — answers how much money you are willing to lose. The mechanical stop answers when the market has told you that your read was wrong. Those are different questions, and only the second one has a structural answer. When the mechanical wrong point is far from entry, the correct response is to reduce position size — not to move the stop closer. Structure defines the stop. Position size manages the risk. These are separate decisions.