The Anatomy of a Stop A stop can be defined by specifying four basic parameters, illustrated in Figure 1 below: Price Reference: The price from which the stop is offset (white line) to create a stop value. Stop Offset: The distance from the Price Reference to the stop value. Price Trigger: The value of price that will trigger the stop. Usually this is the low or the high of a price bar. However, more sophisticated stops can be created by setting the trigger to a custom function of price, such as Average(Low, 3) to make the stop less vulnerable to isolated tall tails. Reset Padding: The distance the stop should be reset away from the Price Trigger when the stop […]
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