Why round-number stops inflate your R

Traders often park a stop under a round price because it is easy to remember. The chart, however, may have already invalidated the idea at a swing low several ticks closer.

When the stop sits beyond structure only for psychological comfort, two things happen. First, the distance in points grows. Second, position size must shrink to keep the same R — or, more often, size stays the same and R quietly expands. That expanded R is not “more room for the trade to work.” It is a larger planned loss for the same thesis.

A practical check used in our Risk Desk Intensive: mark the structure that kills the idea, measure that distance, then ask whether the round number adds information or only habit. If it only adds habit, the stop belongs at structure (plus a small buffer if your market gaps), and size is recalculated from that distance.

This is not an argument against all buffers. It is an argument against buffers that exist only because the number looks neat on the axis.