It’s not enough just to place your stoploss a certain distance from your entry. We want our stop to be somewhere safe, in a place that is very unlikely to get hit. This is called “protecting your stop.”
Fortunately, this is very easy to do!
On the trade above I would place my stop at 131.27. This price is on the opposite side of both the S&R zone and the trendline from our entry point (I’ve marked my stoploss with a red line on the chart below). You’ll notice that if price did reach this stop level then we would have a lower low than the previous 131.46 low. This would mean our upwards trend was failing, and that the price is probably not going to go back up anyway, so it’s a great place for a stoploss.
So we have our entry point and our stoploss, now let’s move on to our profit target.