Free lessons › Breakout & Retest Strategy › The Retest Playbook
Stop placement & invalidation
Where pros put their stop, and why moving it is a loss.
8 min · Beginner
What you'll learn
- Place a stop at structural invalidation rather than at a comfortable dollar amount
- Size a position from the stop distance so a full loss equals 1% of the account
- Explain why widening a stop turns a planned 1R loss into a bigger one
Key takeaways
- A stop belongs at structural invalidation, just beyond normal noise.
- Position size comes from the stop distance, so a wider stop means fewer shares, not more risk.
- Widening a stop turns a planned -1R into a larger loss and wrecks the R-multiple.
- Enter a real stop order with every trade and never move it farther away.
Glossary
- Invalidation — The price at which the chart proves your trade idea wrong.
- Stop buffer — A small extra distance beyond the level and wick so normal noise does not trigger the stop.
- Hard stop — A live stop order placed in the platform when you enter, as opposed to a mental stop.
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