Stop Loss Placement
Learn the difference between structure-based and ATR-based stops, and how QGA combines both for optimal stop loss placement.
Why Stop Loss Placement Matters
Your stop loss is your defense mechanism. Poor placement leads to either:
Stop Too Tight
- • Stopped out by normal market noise
- • Watch trade go to target without you
- • Frustration and emotional revenge trading
Stop Too Wide
- • Position size becomes too small
- • Poor risk:reward ratio
- • Large losses when stopped out
Stop Loss Methods
Structure-Based Stops
Place stop loss beyond key swing highs/lows
Advantages
- •Based on actual market structure
- •Gives trade room to breathe
- •Lower chance of premature stop-out
Considerations
- •Can result in larger stop distances
- •Requires proper position sizing
Best For: Higher timeframe swing trades (H4, Daily)
Example: For a long trade, place SL below the most recent swing low + buffer
ATR-Based Stops
Use Average True Range to calculate stop distance
Advantages
- •Adapts to current volatility
- •Consistent methodology
- •Works across all markets
Considerations
- •May not respect key structure
- •Can be too tight in ranging markets
Best For: Trend continuation trades and scalping
Example: Place SL at Entry ± (1.5 × ATR)
QGA Combined Method
Structure + ATR buffer for optimal placement
Advantages
- •Respects market structure
- •Accounts for volatility
- •Best of both approaches
Considerations
- •Slightly more complex
- •May have wider stops
Best For: All QGA signals
Example: Place SL below swing low + ATR buffer (shown on chart)
How QGA Displays Stop Loss
Every signal shows the recommended stop loss with the placement reason:
The red zone on the chart visually shows the stop loss area so you can see exactly where your risk ends.
Golden Rules of Stop Loss
Never Trade Without a Stop
Every single trade must have a defined stop loss before entry
Never Move Stop Against You
Widening your stop is admitting the trade was wrong - exit instead
Move to Breakeven at TP1
Once first target is hit, move stop to entry price to guarantee no loss
Trail Stop with Structure
Move stop below new swing lows (for longs) as trade progresses
Trailing Stop Strategy
At Entry
Stop at structure level shown by QGA
After TP1 Hit
Move stop to breakeven (entry price)
After TP2 Hit
Move stop to TP1 level or latest swing
Running to TP3
Trail stop below each new swing low (for longs) to lock in profits