Most traders lose money not because the entry was wrong — but because they never defined when the idea is dead.

An invalidation rule is a pre-written exit condition. You set it before you click buy/sell. If price (or the thesis) hits that line, you close. No “maybe it rebounds,” no average-down spiral.

Quick checklist before every trade:

1) Thesis in one sentence (what must stay true?)

2) Invalidation level or event (where/why the thesis dies)

3) Size so a full invalidation is a small, planned loss

4) No moving the stop farther after entry

Concrete takeaway: write the invalidation first, size second, entry last. If you can’t state the kill-switch clearly, skip the trade.

NFA — education only, not financial advice.

What’s your personal invalidation rule before you enter — price level, time stop, or thesis break?

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