We all know this scenario…

<image: The Stop-Out Re-Entry Decision>

And this one, which happens even more frequently…

<image: The Stop-Out Re-Entry Decision>

I’ve certainly experienced this a LOT.

And I know many of you have as well.

Because it leads to one of the most common questions I receive.

  • “Where did I go wrong?”

Where you went wrong is failure to have a plan that allows for this.

Stop-outs are not an anomaly.

They’re so damn common that you could consider them a standard feature of market price action.

So you’d better have a plan for them.

This brings to mind one of my favourite social media posts from a few years ago:

<image: The Stop-Out Re-Entry Decision>

Some of you will do better if you simply widen your stops. It’s not my style. And I can promise you that no matter how far away you put them, the market will still from time to time take them out and then resume the trade without you.

Some of you will do better by simply accepting it as the nature of the markets. Laugh at the ridiculous nature of this game we play. And let the trade go. Build edge from FIRST ENTRIES ONLY. And accept that when these are stopped out and you miss the real move, well perhaps it just wasn’t yours to take anyway. Let it go. And move on.

Or like me, some of you will do better through reconsidering what it means to be stopped out. And instead of seeing it as “trade over”, see it as a chance to reassess with no risk in the markets. Sometimes you’ll see that your stop has saved you from an even greater loss. Well done. Other times though, it offers an even better re-entry.

<image: The Stop-Out Re-Entry Decision>

<image: The Stop-Out Re-Entry Decision>

<image: The Stop-Out Re-Entry Decision>

<image: The Stop-Out Re-Entry Decision>

<image: The Stop-Out Re-Entry Decision>

<image: The Stop-Out Re-Entry Decision>

<image: The Stop-Out Re-Entry Decision>

<image: The Stop-Out Re-Entry Decision> 

Stopped out?

Fine. It happens.

It doesn’t mean that you necessarily did anything wrong.

Perhaps you just misjudged how far price could test back against the direction of your trade.

And perhaps, if you focus and reassess, you might just find the premise is still valid and the market is screaming out for you to take that re-entry opportunity.

Happy trading,

Lance Beggs


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