Where a stop loss goes, and why

Updated 2026-11-13 · 6 min read · By the Tralyzer team

A stop loss is an order that closes your trade automatically if the price moves against you to a set level. It is the one part of a trading plan that protects you from your own hopes. The question is not whether to use one but where to put it.

Put it where the idea is wrong

A long trade bought near support rests on one idea: that support will hold. The stop loss belongs just beyond the point where that idea is clearly wrong, usually a little under the support zone, or under the next support if you are buying in steps. A stop placed for a round percentage, such as “always 3%”, ignores the chart and is often either too tight to survive normal moves or wider than it needs to be.

Tralyzer places the stop loss of each signal 1% under the first 1-hour support that sits at least 5% below the last buy step, so it is beyond the whole structure the trade relies on.

Size the trade from the stop, not the other way round

Decide first how much of your account you are willing to lose on one trade; many traders use 1% to 2%. Then work out the size:

position size = amount you accept to lose ÷ distance from entry to stop

With a 5,000 USDT account and a 1% limit you accept losing 50 USDT. If your average entry is 100 and your stop is 91, the distance is 9%, so the position can be about 555 USDT. A closer stop allows a bigger position for the same risk; a wider stop needs a smaller one.

Habits that turn small losses into large ones

Moving the stop further away as the price approaches it. The level that proved you wrong has not changed.
No stop at all “because it will come back”. Some coins never do.
A stop inside the noise. Too close to the entry, it is hit by ordinary swings before the trade can work.
Leverage that liquidates first. On futures, check that the liquidation price is beyond your stop loss, or the exchange closes you before your plan does.

Gaps and fast moves

A stop loss becomes a market order when it triggers. In a sudden crash it can fill below the stop price, a loss called slippage. It is still far smaller than holding a falling coin with no exit.

Tralyzer shows market information, not financial advice. You decide and place every trade yourself, crypto prices move fast, and you can lose money.