Risk
The price that, if reached, proves the trade idea wrong — decided before entering, and where the stop belongs.
A setup without an invalidation level is not a plan. Defining it in advance is what stops the decision being made under pressure, when it is made worst.
It is a chart decision. What you are comfortable losing decides position size, not where the stop sits.
Also called: invalidation.
Taught in
Where a Stop Actually BelongsRisk Before Anything ElseA stop marks the level that proves the read wrong — not a distance chosen for comfort.
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Related terms