Before I enter any position, I can tell you the exact price at which the idea is wrong. Not “where I’d get nervous.” Not “where I’d re-evaluate.” The price where the reason I bought no longer exists — decided before entry, written down, order placed.

That number is the most important part of every trade I take. The entry is almost incidental.

Why the exit comes first

A trade is a hypothesis: “demand shows up in this zone.” Like any hypothesis, it’s only meaningful if it can be proven false. If price falls through the zone decisively, demand wasn’t there — hypothesis dead, position closed, next. No debate, because the debate happened before entry, when I was calm and had no money at stake.

Traders who decide their exit after entering are asking their most emotional self — the one watching an open loss — to make their most important decision. That self doesn’t cut losses. That self averages down, moves stops, and “becomes a long-term investor” one red candle at a time. I know because early in my career I was that self, and the tuition was expensive.

The invalidation point sets everything else

Here’s the mechanical beauty of exit-first thinking: once you know where you’re wrong, position sizing solves itself. Distance from entry to invalidation, divided into the money you’re willing to lose (for me, 1% of the account), gives the exact share count. Wide stop, small position. Tight stop, larger position. Risk stays constant; the trade’s geometry does the math.

Notice what’s missing: any opinion about how much I’ll make. Targets are the market’s business. My business is the loss.

The question that filters everything

“Where am I wrong?” also turns out to be the fastest filter for other people’s ideas. Next time anyone pitches you a stock — a friend, a feed, a headline — ask them that one question. If the answer is a price and a reason, you’re talking to a trader. If the answer is a story about why it can only go up, you’ve learned everything you need to know.

Educational only — my own process, not investment advice. Past performance is not an indication of future results.