Stop Guessing Where Your Stop-Loss Belongs
Use this free Structural Risk Matrix to determine where the chart says your stop belongs, calculate position size from real dollar risk, and verify whether the trade offers enough reward before you enter.
Your Stop Should Not Be a Guess
A lot of traders know how much money they are willing to risk, but they confuse that with knowing where the stop-loss belongs.
Those are two different decisions.
The market determines the price level that invalidates the setup.
Your risk rules determine how large the position can be.
And the available reward determines whether the trade deserves your capital.
The Structural Risk Matrix gives you a simple process for checking all three before you enter the trade.
A Simple 3-Step Risk Framework
Find the Structural Stop
Identify the level where the trade thesis is actually invalidated instead of placing the stop at a random percentage.
Calculate Position Size
Use the distance between entry and the structural stop to calculate how much size fits your predetermined dollar risk.
Verify the Reward
Make sure there is a realistic path to at least a 2-to-1 reward relative to the structural risk.
Built to Use Before You Enter the Trade
The guide includes a printable Quick Trade Planner so you can work through the setup before putting capital at risk.
- Define the entry
- Mark the structural invalidation point
- Calculate stop distance
- Define maximum dollar risk
- Calculate position size
- Identify the realistic target
- Verify reward-to-risk
- Decide whether the trade qualifies
From Doug Campbell at Right Way Options
Doug Campbell has spent decades in the markets and many years helping traders build more disciplined trading processes.
His approach at Right Way Options is built around a simple principle:
Price is King.
Rather than trying to predict what the market should do next, traders learn to read price structure, wait for confirmation, manage risk, and let the market lead.
This guide is designed to help traders bring that same discipline to stop placement and position sizing.
Know the Risk Before You Take the Trade
A trade should make sense before you enter it.
Use the Structural Risk Matrix to determine where you are wrong, how much you can afford to risk, and whether the potential reward justifies putting capital to work.
Educational purposes only. Nothing presented by Right Way Options constitutes financial, investment, or trading advice. Trading involves risk, including the possible loss of principal. Past performance does not guarantee future results.