Chart & Trading Fundamentals
Risk, Stops & Position Sizing
Step 1 of 5 · A stop marks where you're wrong0 pts
You can be right more often than wrong and still lose everything if the losses are big enough. Which outcome you get is decided before the trade, by two numbers: where you get out, and how much you commit.
Choose a stop by asking what price would prove your reason for being here was wrong — not how much you are willing to lose. If you bought a , price falling back below that level says the breakout failed.
Two practical warnings
A stop does not guarantee your price. If the market gaps past it you are filled at the next available price — the gap risk from lesson one.
Placing stops exactly on obvious round numbers puts you where everyone else is, which is precisely where price tends to get pushed.
Quick check
Answer to see the explanation — a wrong answer never blocks you.