Stop-Loss

A stop-loss is the price at which you admit a trade is wrong and get out — decided before you enter, when you're calm and objective rather than mid-loss and emotional. It is the single most important risk tool a trader has, because it defines the 'R' (risk) in every plan.

You place a stop at a level that would prove your thesis wrong — typically just beyond a support or resistance level, or below a moving average you expect to hold. Common types:

• Hard stop: a resting order that auto-executes at your price.
• Mental stop: a level you commit to act on manually (only works with discipline).
• Trailing stop: follows price up to lock in gains as a winner runs.

Your stop distance drives your position size and your risk-reward ratio — everything connects here.

The uncomfortable truth of trading: a great entry with no exit plan loses money, while an average entry with strict stops survives. The math of losses is asymmetric — a 50% loss requires a 100% gain to recover — so avoiding large losses matters more than catching big wins. Cutting losers small is what keeps you in the game.

This is the discipline Entry Point Trading teaches in the open. Every call carries a defined place it's wrong, and we grade the outcome publicly — misses included.