How do you set stop losses in price action trading?

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Price action traders seem to place stops at specific levels. What is the logic behind stop placement?

#price-action

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Trading Wolf

Trader · 15 days ago

Stops go at the level where the trade idea is proven wrong. For long entries at support: SL below the candle low that formed at support (with a small ATR buffer). For short at resistance: SL above the rejection candle high.

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Wolf Alpha

Trader · 15 days ago

The distance to your logical stop determines your position size, not vice versa. If the logical stop gives 200-point risk but you only want 50 points of risk, reduce position size — do not tighten the stop.

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How do you set stop losses in price action trading?

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