In the next chart, we can see how this trade worked out for the trader who knew how to place stops properly / like a pro and who wasn’t placing his stop arbitrarily or based on greed (to trade a bigger size). Stops are crucial to managing risk because once we find the stop loss placement we can then determine our position size on the trade and then we know ahead of time the cost and risks of the trade. My trading course and members’ area will further educate you on how I place stop losses and how I incorporate stop loss placement into my overall trading strategy.