Why it matters
Stops are core risk tools, but they behave differently in fast markets.
Decision use: treat this term as a risk input. If you can’t observe it, you can’t size for it.
Common trap
Assuming stops are precise exits under stress.
Example
A stop triggers during a gap and executes far away.
Operational cue: if you can’t point to it on the chart, in the DOM, or in your broker logs, treat it as a story and trade smaller.
Notes
Stops are damage control, not precision control.
Quick rule
- If you see this repeatedly, you are in a different regime than your model assumes.
- Regime change usually means position size change.
- When in doubt: trade smaller, or don’t trade.