Where to place your stop loss and take profit, step by step

• If you open a short (you profit if the price falls), the stop goes above the previous high, that is, above resistance.
• If you open a long (you profit if the price rises), it goes below support. Not on support: below it.

The reason is that price often comes back to touch the level before turning: a double top, or a move that liquidates anyone sitting right on the line and then reverses. That’s why, he says, “you have to give it enough room.” If you can’t mark those levels yet, start with the guide to support and resistance.

CryptoBruj works with two limits he decides before looking at any trade:

1. A minimum risk/reward ratio of 2. For every dollar you risk, you aim to make at least two. He points out that everyone can set their own; in one of his examples he uses 1.75.
2. A maximum loss per trade if the stop is hit. For him, no more than 3% or 5% of the total account, and some people don’t want to lose more than 1%. Above that: “losing more than 5% per trade is a bit crazy.” If you’re just starting out, he recommends sticking to 2%, or even 1%.

What you lose doesn’t depend on the stop alone, or on leverage alone. It depends on all three numbers together:

loss (as % of your account) = % of the account you use × leverage × distance to the stop (in %)

His example, with an account of $10,000:

His spreadsheet paints it red, because it’s above 5%. His conclusion: “it might work out for you, obviously, but it’s very risky.” With that same 2% stop, the minimum take profit for a 1.75 ratio sits 3.5% from the entry; for a ratio of 2, 4%.

Using the same $10,000 example:

1. Move the stop closer. With the stop at 0.5% instead of 2%, the loss drops to $300, 3% of the account. This only works if the chart allows it. If the stop ends up too close to the level, you’re back to the problem from step 1.
2. Lower the leverage. With 3x instead of 20x, the loss drops to 1.8%.
3. Use a smaller share of the account. With 5% instead of 30%, the loss stays at 2% ($200).

The order matters. In his practical example he first decides where the stop has to go based on the chart, and then adjusts size and leverage so the loss stays within his limit. The stop doesn’t move to make the numbers work: what you adjust is the size.

He opens a long and knows the stop has to go, “no matter what,” in a specific zone: 0.54% from the entry. With a stop that tight, the risk depends mostly on size:

• With 20x and 5% of the account, if the stop is hit he would lose 0.54% of the account.
• With 30% of the account, the loss rises to 3.24%, already close to his limit. A tight stop doesn’t make a large position small.
• For a ratio of 2, the take profit has to be at least 1.08% from the entry (twice the distance to the stop). He looks for it on the chart and places it in that zone.

With a 2% loss per trade, calculated on starting capital, it would take about 50 losing trades in a row to wipe out the account. Raise the limit and you run out of room much sooner: at 10%, he warns, 10 losses in a row are enough to burn through all of it. The higher the limit, the more aggressive you’re being.

In the video he uses his own spreadsheet: you enter the size and it tells you how much you lose. The position size calculator does the same math in reverse, which is the order from step 4: you enter your capital, how much you’re willing to lose, the entry and the stop the chart calls for, and it tells you what size to open and the minimum leverage you need. If you add the take profit, it also gives you the reward/risk ratio.

Try his example from the other side: 10,000 in capital, 5% risk, entry at 60,000 and stop at 58,800 (2% away). It will tell you to open about 23,600 USDT notional with the default fee, or 25,000 without it. That’s less than half of the 60,000 in the example he paints red.

• Putting the stop right on support or resistance. Price often comes back to touch the level before turning, and it takes you out of the trade.
• Looking only at leverage or only at the stop. Risk comes from multiplying all three numbers. A tight stop on a huge position can cost you more than a wide stop on a small one.
• Risking more than 5% of the account on a single trade, or more than 1 or 2% if you’re just starting out.
• Taking trades with a worse ratio than the one you set because “this one looks good.”
• Moving the stop further away when price gets close. You put it there because of your analysis. He explains it in his basic trading rules.