Trading Strategy: When to Adjust Your Stop Loss

When a “Perfect” Trade Isn’t: How One Rally-Base-Rally Forced Me to Rethink My Stop LossHey traders! Ever mapped out what looks like a textbook setup, only to have the chart laugh in your face? That’s exactly what happened in this clip with Mitch Firestone—and the lesson saved (and made) the trade. Let’s break it down step-by-step so you can spot these pivots on your own charts.The Setup That Almost WasI started with what seemed like a slam-dunk demand zone:Entry: Clean bounce off a fresh base

Stop Loss: Tucked neatly below the zone (classic 1:1 risk)

Target: 2:1 reward, easy money… right?

Wrong. Mitch paused the chart, zoomed out, and pointed to something I completely missed: a rally-base-rally (RBR) pattern to the left.Suddenly, my “tight” stop was sitting inside the prior base—aka, prime territory for a fakeout.How to Spot a Rally-Base-Rally (RBR) PatternRBR is a supply/demand purist’s dream. Here’s the anatomy:Rally #1: Strong upward move (institutional buying)

Base: Tight sideways consolidation (orders stacking)

Rally #2: Breakout continuation (confirmation)

Pro Tip: The base is your demand zone. Price must respect it on retests. If your stop sits inside it, you’re begging for a stop hunt.The Big Aha: “Level on Level” ThinkingMitch dropped a gem: Treat key levels as “level on level.”My original stop ignored the left-side RBR base. That base was now a supporting level beneath my new setup. Translation? Price needed room to breathe—a retest into the prior base was normal, not a failure.Old Stop: 1.5R below entry → inside prior base → high stop-hunt risk

New Stop: Below the entire RBR structure → 2.8R risk, but real protectionWhen (and How) to Adjust Your Stop LossScenario

Action

Stop inside prior base

Move it below the full structure

Pattern shows "room to breathe"

Allow 1–2% wiggle room

Risk > 2% of account

Skip the trade—discipline first

Purist Supply/Demand View: Stops go below the zone that matters most, not the one that’s convenient. Mitch calls this “respecting the order flow.”The Outcome? A Flexible WinAfter adjusting:Price wicked into the prior base (would’ve stopped me out)

Reversed hard and hit the 2:1 target

Net result: +2R instead of a -1.5R scratch

The trade worked, but the real win was the process: zooming out, honoring structure, and staying disciplined even when it meant a wider stop.Your Turn: Do You Adjust Stops for Chart Context?I used to be a “set it and forget it” trader. Now? Every stop gets a second look through the RBR lens.Drop your take in the comments:   “I always zoom out for left-side structure”

“Tight stops or bust—fakeouts are part of the game”

Let’s debate! Disclaimer: This content is for educational purposes only and should not be considered financial advice. Trading involves substantial risk and may not be suitable for all investors.#Trading #TechnicalAnalysis #SupplyAndDemand #StopLoss #ChartPatterns #RiskManagement #TradingEducation