The question
What can you lose if the idea fails?
- Point distance and dollar exposure are different.
- Fees and slippage affect both winners and losers.
- A large target does not establish positive expectancy.
Calculate from your available price.
The distance between your actual entry and the stop, multiplied by the contract’s point value and your quantity, describes planned price exposure. Add execution costs and consider your other positions.
A 20-point adverse move is $400 per NQ or $40 per MNQ before costs. This is contract arithmetic, not a recommended position size. The available entry may differ from the alert’s published level.
A stop is not a guaranteed loss limit.
Gaps, fast markets, and thin liquidity can lead to worse fills than the planned stop. A stop-market order does not guarantee price; a stop-limit order may remain unfilled.
Margin is collateral, not a statement of what you can afford to lose. Consider your own circumstances and broker restrictions before taking exposure.
Read reward alongside probability.
A target describes a possible payoff. Win rate describes how often a defined outcome occurred in a particular sample. Neither establishes profitability on its own.
A credible evaluation also considers average gains and losses, fees, slippage, drawdown, and sample size. No verified expectancy or performance is presented in this guide.
Partial exits change the arithmetic.
Reaching Take Profit does not mean that the entire position earned the distance to TP1, or that a remaining position eventually reached TP2. The result depends on how much exited at each level, actual fills, and costs.
Do not assume a universal partial-exit percentage or automatic breakeven rule from the target names. Read the specific published plan and any subsequent stop revision. A breakeven price exit can still lose money after commissions and slippage.
Sources & further reading
Consult the original exchange or platform documentation for current specifications, schedules, and simulation behavior. These sources do not validate our strategies.