When your stop is not your risk

Module 3's slippage lesson priced a gap after it happened. This lesson moves the same arithmetic to the only place it earns money: before entry, as a sizing input.

When is the stop's promise good?

Whenever the market can trade every price on the way down. In continuous, liquid hours a stop fills at or within a pip or two of its level, and lesson 2's sizing chain - built on stop distance - is telling the truth.

The promise breaks where quoting breaks: the weekend close, the seconds around scheduled releases, the thin hours module 2 mapped. Price does not travel through the intervening levels; it reappears somewhere else, and a stop inside the jump fills at the far side. The stop was honoured. The distance was not.

How does the worst case become a sizing rule?

Run lesson 2's chain with a different denominator. Instead of the stop distance, use stop plus the plausible gap for the window you intend to hold through - what the pair has actually jumped across comparable weekends and releases, which module 2's calendar work lets you look up rather than guess. The chain then produces a smaller size, one whose worst case lands inside your lesson 1 fraction.

The alternative rule is flatness: close before the window, hold no position across it, and keep the larger size the continuous-hours arithmetic allows. Both rules are coherent. Sizing on the stop while holding through the gap is the only combination that lies to you.

What does the choice cost?

The gap-sized position is smaller, so continuous-hours wins are smaller too - that is the premium paid for surviving the discontinuity. The flat-over-weekends rule pays instead in missed moves that happen without you. The worked example prices what the unpriced third option costs when it goes wrong, and that number is the one to weigh the premiums against.

What this means for you

Decide, per window, which rule is yours: size for the gap, or be flat for it. Write the rule into the plan lesson 9 assembles, and let the calendar - not the position you happen to be holding on Friday afternoon - trigger it. The one unavailable option is the default one: full size, held through, stop trusted.