Why set your stop before you buy
Short · Risk & sizing · October 10, 2026
Olympia publishes educational content for learning purposes only. Past performance is not indicative of future results. Nothing here is investment advice.
Because losses don't come back even. Lose ten percent and you need eleven to get back; lose half and you need to double. One R caps the damage before you're in, and at three R one win pays for three losses — so winning one in three puts you ahead.
The lesson in writing
Why set your stops and targets before you're in, instead of getting out when it feels right?
Because losses don't come back even. Lose ten percent and you need eleven to get back. Lose half and you need to double. A stop keeps you in the fight.
What it is
One R caps the damage before you're in. One percent of a twenty-five thousand dollar account is two hundred and fifty bucks — not a big deal.
And the rest of that money doesn't just sit there. You're taking your eggs and putting them in five strongly researched baskets. One or two fall: two hundred and fifty, five hundred. No big deal.
With no stop at all, one position can take a multiple of that out of the account in a single trade. That is the whole difference the number makes.
How it's worked out
If you think one percent is too small for your style, two percent works. Five is considered aggressive — ten losers in a row at five percent takes about forty percent of your account out of the picture, and now you're looking for the door.
Targets use the same ruler. At three R, one win pays for three losses — so win one in three and you're ahead.
That is the arithmetic, not a promise about any one trade: the ruler tells you what a win has to be worth for the plan to survive an ordinary run of losses.
Where Olympia calculates it
Olympia calculates it where you log a trade: your one R, your stop, and one, two and three R off it.
And this is why you want to set your stops. It's not the number, it's the machine — the same rule every trade, so you know how you're really doing.
You get to enjoy your life, relax, and not stress about how much you're losing, because you knew before you got in the trade.
Example numbers, not a member's: a $25,000 account at 1% risk, five $5,000 positions, in Olympia's I'm In window. The recovery and R arithmetic is worked from those inputs, not a forecast.
