Logical boundary
If an idea depends on a key structure holding, a sustained move through that structure is evidence that the idea needs to be withdrawn or downgraded.
Normal volatility
A boundary that sits inside normal market noise can treat ordinary fluctuation as invalidation. A boundary placed too far away can make the position risk unacceptable.
Size follows distance
Define the invalidation distance first, then calculate position size from the maximum loss the plan permits. Never move the boundary merely to preserve a preferred position size.
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