All trades must have a plan for trade direction, trade entry, profit level and stop loss level. A stop loss must be executed when price violates my analysis. I will always trade with stop loss execution and try to minimize the loss. Stop level and stop execution is not the same thing.
I trade with structure boundaries and entries are as close to them as possible. When the structure boundary has been breached, stop loss area has been identified but must now be evaluated. One evaluation is news, has a news event caused an abrupt change in price direction? Another involves the use of 21 EMA and EMA alignment of 21, 100 and 200 EMA on 1-hour chart. For daily chart the 55 EMA can be used with less reliance on 200.
Stop cannot be determined by a price level It cannot be determined by # of pips from entry It has to be determined by change in price direction. When price changes direction against my open position, a stop must be used. Choose a price level that will be reached and minimizes loss.
HABIT – I have a bad habit of looking at price in the moment and it’s movement and then impulsively executing a trade. Instead, I should look at the chart and identify areas for entry and when price is in that area then execute trades.
Price Action Trading 