Stop placement — the invalidation principle

A stop is not a pain threshold; it is the price at which the reason for the trade is gone. For a long, the thesis includes "support holds," so:

structStop = support − 0.45 × ATR        thesis-invalidation point,
                                          padded so ordinary noise that
                                          briefly pierces the level
                                          doesn't tag the stop
stop = max(structStop, entry − 2.2×ATR)  risk cap: if support is far,
                                          the trade risks at most 2.2 ATR
stop = min(stop,       entry − 0.8×ATR)  noise floor: if support is
                                          on top of price, a sub-0.8-ATR
                                          stop would be hit by random
                                          bar-to-bar variation
risk = entry − stop                       (mirror all signs for shorts)

The three constants (0.45 buffer, 2.2 cap, 0.8 floor) are config, denominated in ATR so they self-adjust to each instrument's volatility, and are calibration-tunable.