“I moved my stop” is a sentence with a number underneath it

Traders say it easily. I moved my stop. It gets said the way people admit to a sweet tooth, and it usually arrives with a shrug, because there is no number attached to it.

There is a number. It is in your own history and it takes four columns to find.

The two risks in every trade

Every trade you take has a risk you chose and a risk you ran.

The risk you chose is the distance from your entry to the stop you set before you were in. The risk you ran is the distance from your entry to where you actually got out, or to the stop you were sitting on at the end. On a trade you left alone, those are the same. On a trade where the stop moved away from you, the second one is bigger, and the gap is the thing nobody counts.

Write both in the same units and the whole habit becomes arithmetic.

The four columns

• Entry price.
• The first stop, the one you set before the trade was live.
• The final stop or exit, whichever ended it.
• Size, so the numbers are comparable across instruments.

From those, two derived numbers. Planned risk is entry minus first stop, times size. Actual risk is entry minus final exit, times size. Divide the second by the first and you have the trade’s number: 1.0 if you left it alone, 2.4 if you gave it more than twice the room you decided on.

Most platforms will not hand you the first stop. Broker exports carry fills, not intentions, so the stop you set and then changed is usually gone from the record. That is not a technical problem. It is the reason the habit is invisible, and it is why the first stop belongs written down at entry, in whatever you already use, even if it is a notebook.

The three numbers to read

How often. The share of trades where the final risk was bigger than the planned risk. Not the feeling, the count. Traders who would tell you it happens rarely often find it in a fifth of their trades once it is a column.

How much. The average of those ratios, across the trades where it happened. This is the number that tells you what your stop actually means. A 1.3 average is a habit with a leash. A 2.5 average means the stop you write down is closer to a suggestion than a rule.

What it cost. The August piece claimed the bill for this habit does not arrive on the days it works, and hides instead in the size of the worst loss of the year. Here is how you check that on your own record. Sort your losses by size, look at the top five, and mark which of them had a moved stop. In most logs the worst loss of a quarter and the moved stop are the same trade, and it is not a coincidence: a loss can only get that big if something let it.

Reading the pattern, not just the total

Once the column exists, the interesting part is not the average. It is where the ones cluster.

Put the moved-stop trades next to the time of day, the instrument, and what the trade before them did. They will not be evenly spread. The common shapes are after a losing trade, in the last hour of a session, and on the instrument a trader has decided is personal.

That is a diagnosis you can act on this week, because it tells you when to be watching, which is specific in a way that “be disciplined” never is.

What changes when it is a number

A habit you can only confess gets forgiven weekly. A habit with a number gets watched, and the number moves.

Count it for a fortnight and you will know your own rate. Count it for a quarter and you will know what it costs, in the only currency that matters here, which is the size of the worst thing that happened to your account.

The August piece explained why the second decision feels like analysis. This is how you find out what that feeling has been charging you.