Glossary / Price action

Stop placement

An educational concept. Not a signal, not a strategy, and not a trade Josh has taken.

A flowing ice-blue glass ribbon rising and dipping through empty space, an unlabeled picture of price in motion.
Illustration of the idea, not a market chart and not a result.

Choosing where the stop-loss goes: just beyond the level that invalidates the idea, with a buffer for normal noise and spread.

How traders use it: Common choices are beyond the swing, beyond the zone, or beyond the wick of the trigger candle, sometimes padded by a fraction of ATR.

Common mistake: Placing the stop exactly on an obvious high or low where liquidity sits, or tightening it to fit a bigger position.

Related: Invalidation · Average true range (ATR) · Sell-side liquidity

See this term in the full glossary · All terms

Concepts only. Education only, not financial advice. No pattern on this site has a published win rate.