Why every trade gets a stop and a target before it’s placed

Most losses that hurt didn’t start big. They started as a small loss with no plan, held because getting out would make it real. The fix is boring: decide where you’re wrong before you’re in.

Start from the stop, not the share count. If the stop is $2 below the entry and you’re willing to lose $100 on the idea, the position is 50 shares — whatever the price. That way every trade risks about the same, and no single one can do real damage.

A stop you plan to place later is a stop you might not place: the phone dies, a meeting runs long, the price gaps through. Sending the stop and the target with the entry — a bracket order — means the exits are working at the broker from the first second, whether you’re watching or not.

The target matters too. A trade that reaches 2R and comes back to the entry was a good trade managed badly. Taking part of the profit at a planned level, and moving the stop up behind the rest, turns more good trades into kept gains.

• Where am I wrong? (the stop)
• How much will I lose if I am? (the size)
• Where do I take profit, and what do I do with the rest? (the target and the trail)
• Is it on the order? (yes, before it goes)