The Invalidation Principle
Your stop loss should be at the level where your trade thesis is invalidated. 否t at a random distance, not at a round number, and definitely not 'where it feels right.' Each SMC 设置 has a specific invalidation point.
Order Block Entries
Stop goes beyond the OB's extreme wick. If entering a bullish OB, stop below the lowest wick of the OB candle. Add 1-2 pips buffer for spread. If the full OB wick is swept, the institutional orders are no longer valid.
FVG Entries
Stop below the FVG low for bullish entries. If the entire FVG is filled and broken, the imbalance thesis is invalid. For tighter stops, use the consequent encroachment (50% of FVG) as the stop level — but accept that this will produce more stop-outs.
ATR-Based Dynamic Stops
For volatile assets like crypto and gold, static pip-based stops don't work. Use 1.5x ATR(14) as your minimum stop distance. This adjusts automatically for volatility conditions. 何时 volatility is high, stops widen. 何时 volatility is low, stops tighten.
The R-Multiple Framework
Always calculate your R before entering. If your stop is 20 pips, your take-profit should be at minimum 40 pips (2R). Never enter a trade where the stop-to-目标 ratio is less than 1:1.5. Use our free R:R calculator to calculate before every trade.