A stop is an invalidation level
Place the stop where your reason for the trade stops being true — below structure, beyond a volatility band — not at the loss amount you find comfortable. Then size the position so that distance equals your risk limit.
Trailing versus fixed targets
Fixed take-profits produce a high win rate and capped upside. Trailing stops give up some open profit but let trends run. Trend strategies usually prefer trailing; mean-reversion usually prefers fixed.
Ready to put this into practice?
Test your exit rules in paper trading →Test both before you activate
The backtester shows the same rule set under both exit styles. Compare maximum drawdown, not just total return — the version you can hold through a losing month is the one that will actually run.