Who this is for — Anyone who places random percentage stops and then finds price hits them before the expected move develops.
In plain terms — The technical stop goes where the setup stops making sense, not where it "hurts less". Decide structure first, then adjust size.
Bronze prerequisite — Before this lesson: trend, timeframe, support, stop-loss. See bronze-path.
Where to place it professionally
The technical stop comes from invalidation logic: structural low, broken key level, negated range.
Distance in ticks or points is not the problem: it follows from the structure you are trading.
If the stop is too wide for your risk per trade, do not tighten arbitrarily: reduce size or skip the setup.
This step links technique and capital management.
Technical stop and position sizing
Once stop distance is defined, calculate quantity with position-sizing.
Monetary risk stays stable even when volatility changes.
The same setup can have different size on different days: that is normal, and a sign of control.
Example — Long setup on pullback: technical stop below pattern low. Distance 0.8%. With fixed 0.5% capital risk, size is calibrated automatically — not "by feel".
Card
- What it is: stop loss anchored to structural invalidation.
- When to use it: before entry, to calculate size and payoff.
- Typical mistake: tightening the stop only to increase size.
Silver path — Module: Building a setup. Part of silver-path.