Playbook 03 · Slide 08 of 10 · Risk Management · Structure-Based Stops · Layered Exits

Stop Loss & Profit Taking

Stops based on market structure, not dollar amounts. Layered exits to lock gains while letting runners work.

Hard Max Stop

10 pts

No override ever

Layer 1

+5 pts

Exit 50%, move to BE

Layer 2

+10 pts

Exit 25%, trail to +3

Layer 3

Runner

Trail to key level

Stop Placement

Trend long stop: Below the bracket high. If the bracket high was 5855, stop at 5853.

Trend short stop: Above the bracket low. If the bracket low was 5838, stop at 5840.

Fishing buy stop: Below the signal bar's low.

Fishing sell stop: Above the signal bar's high.

Hard max: 10 points. If the structure stop is wider than 10 points, skip the trade.

Profit Taking (3 Layers)

Layer 1 (+5 pts): Exit 50% of position. Move stop to breakeven. This locks in a profit even if the rest fails.

Layer 2 (+10 pts): Exit 25% more. Trail the remaining stop to +3 points from entry.

Layer 3 (Runner): Let the final 25% run. Trail the stop to the previous swing low/high or VWAP. Target the opposite bracket edge or session extreme.

Result: Even if the runner stops out at +3, you still have +5 from layer 1 and +10 from layer 2 = net positive.

⚠ Structure Stops, Not Dollar Stops. The stop goes where the market tells you it should go — at a level that, if hit, proves the trade thesis wrong. Never set a stop based on how much you're willing to lose. Set it based on where the market structure says it belongs.

Setup	Stop Location	Layer 1 (+5)	Layer 2 (+10)	Runner Target
Trend Long	Below bracket high	50% exit, BE stop	25% exit, trail +3	Opposite bracket or session high
Trend Short	Above bracket low	50% exit, BE stop	25% exit, trail +3	Opposite bracket or session low
Fishing Buy	Below signal bar low	50% exit, BE stop	25% exit, trail +3	Bracket high or VWAP
Fishing Sell	Above signal bar high	50% exit, BE stop	25% exit, trail +3	Bracket low or VWAP