Stop Placement
Volume Spread Analysis glossary · Climaxes, Tests, Springs & Upthrusts
Definition
The VSA rules for protective stop placement: for longs, place the stop below the last reaction low (the most recent swing low or, on a spring/shake-out entry, below the spring low); for shorts, place the stop above the last reaction high (or above the up-thrust/UTAD high). Use odd, irregular numbers (e.g., $48.37 or $99.83) rather than round numbers ($50.00, $100.00) because market-makers routinely hunt the clustered stops at round levels. Trail stops as the position moves into profit to lock in gains while letting winners run.
Stop Placement in plain English
A "stop" is a safety order that automatically closes your trade if the price moves against you, capping your loss. VSA says place it just past the last turning point: for a buy, put it below the most recent swing low (or below the spring low if you entered on one); for a sell, put it above the most recent swing high. Crucially, use an odd, specific number like $48.37 instead of a round $50.00, because lots of people cluster their stops at round numbers and big players deliberately push price to those spots to trigger them. As your trade gains, slide the stop along behind it to lock in profit while still giving the winner room to run.
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