L4.1 — Stop Placement Before Entry: The Non-Negotiable Rule

The stop-loss must be placed before the entry order. Not after. Not "I will manage it manually." Before. This is not a suggestion — it is the mechanism that separates structured trading from gambling. Every trade must have a defined invalidation level before it is placed, and the stop must sit at or just beyond that level.

Structural stop placement: the stop sits below the structural level that the setup depends on. For a long at a support zone, the stop sits below the zone — at the point where a close below it means the zone has failed. For a BOS continuation, the stop sits below the flipped level. The stop is not placed based on pip count or account tolerance — it is placed based on structure.

The consequence of correct stop placement is that your position size is derived from the stop distance and your risk percentage — not the other way around. If the structurally correct stop distance produces a position size that you are uncomfortable with, the answer is to trade smaller or skip the trade — not to move the stop closer to make the numbers work.