Stop Losses

Stop LossesLesson 8 of 125 min read

Wicked out anyway

An offset stop still gets taken. The reason is usually the chart the sweep was read from, not the size of the buffer.

The offset from the last lesson prevents one specific accident. It does not make a stop safe.

A buffer is not protection

A stop placed several dollars beyond a level still gets taken. That happens regularly, and it is not evidence that the rule failed.

The buffer only stops you being closed by the quote. Everything past that is the market moving.

The offset removes a mechanical loss. It cannot remove a real one.

The usual reason

When a properly offset stop keeps getting hit, the sweep is almost always the problem.

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