Have you noticed how easily your stop gets taken out when you place it at the previous low or on a moving average?
I made that mistake before. I put my stop right at support, and one wick took me out. Then the price shot straight back up without looking back... That feels worse than getting liquidated.
I got smarter after that: place your stop beyond where “most people put theirs.” For example, if the previous low is 160, don’t put your stop at 160—try 159 or a little lower, and give that wick some room.
Market makers love hunting liquidity. Your stop is their prey. If you place it at an obvious level, you might as well be handing them money.
A few days ago, I went long on SOL. The previous low was 161, and I put my stop at 160.5. A wick dipped to 160.3, missing my stop by 0.2, and then the price shot up to 170. If I’d put it at 161, I’d have been stopped out for sure.
How do you usually set your stops?
I made that mistake before. I put my stop right at support, and one wick took me out. Then the price shot straight back up without looking back... That feels worse than getting liquidated.
I got smarter after that: place your stop beyond where “most people put theirs.” For example, if the previous low is 160, don’t put your stop at 160—try 159 or a little lower, and give that wick some room.
Market makers love hunting liquidity. Your stop is their prey. If you place it at an obvious level, you might as well be handing them money.
A few days ago, I went long on SOL. The previous low was 161, and I put my stop at 160.5. A wick dipped to 160.3, missing my stop by 0.2, and then the price shot up to 170. If I’d put it at 161, I’d have been stopped out for sure.
How do you usually set your stops?