To be profitable, we have to get our stop placements correct:
- Below or above a sure low or high if we’re in a trend.
- An intermediate low or high might be okay in a breakout from a trading range (TR), but the amount traded ought to represent the distance to a definite stop position.
- In a TR, or suspected TR, the stop ought to be equal to the depth of the TR beyond the bottom or top of the TR.
Correct stop positions go a long way to a consistently profitable account. Some would say they (stops) are all the way.