Never move your stop loss away from entry
Moving a stop loss away from your entry converts a planned, budgeted loss into an unbudgeted, open-ended one. You placed that stop when you were objective — before the trade, with no money on the line. The version of you that wants to move it is watching a loss and negotiating. One direction is always fine: toward profit. The other direction is how accounts die.
The math of one moved stop
Say you risk 1% per trade with a system that wins half the time at 2R. Over ten trades that edge grinds out roughly +5%. Now move one stop: a single loser allowed to run to −5% instead of −1% erases the profit of the entire sequence. Two moved stops put the account underwater despite the strategy performing exactly as designed. The strategy was never the problem — the intervention was.
| Behaviour | 10-trade outcome (50% win rate, 2R wins) |
|---|---|
| Stops honoured | 5 wins × +2% + 5 losses × −1% = +5% |
| One stop moved to −5% | +5% becomes roughly 0% — a month's edge gone |
| Two stops moved | Account negative despite a working strategy |
On a funded account the damage is faster, because a single oversized loss can breach a daily or trailing drawdown limit outright — the account does not get a chance to recover, it just ends.
Why your brain wants to do it anyway
Loss aversion: a paper loss does not feel real until the stop fires, so moving the stop feels like preventing the loss rather than enlarging it. Add a plausible story (“it is just spread widening… news is about to reverse it”) and the move feels analytical. It is not analysis. The test is one question: would you open a new short of this size at this price right now? If not, the only reason you are still in is that exiting makes the loss feel real. That is the stop's job. Let it fire.
What is allowed: moving stops toward the trade
- To breakeven once price has moved meaningfully in your favour (commonly at +1R) — the trade becomes a free option;
- Trailing behind structure — under successive higher lows or a moving average, locking profit as the trend pays;
- Tightening before an event you do not want to hold through.
Each of those reduces risk. The forbidden move is the one that increases it. The rule is direction, not motion: stops move toward profit, never away from it.
Frequently asked questions
Is it ever correct to widen a stop loss?
Before entry, yes — if the analysis says the stop belongs behind a further level, place it there and cut the position size so risk stays at 1%. After entry, widening is a size increase on a losing trade decided under stress, and the honest version of that decision (“would I add to this loser?”) is one almost no one would take.
Should I move my stop to breakeven?
It is legitimate risk reduction, with a known cost: normal price rotation will sometimes tag breakeven and then run to your target without you. A common middle ground is moving to breakeven only after +1R, or trailing behind actual structure (the most recent higher low) instead of your entry price, so the stop sits behind something the market must break to prove you wrong.
What is the difference between a stop loss and a mental stop?
A platform stop executes without asking how you feel; a mental stop asks, at the worst possible moment, whether you would like to honour it. Under pressure the mental stop becomes a negotiation — the exact failure this page is about. Unless your market's structure demands otherwise, place the real order.
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