Guide 11.3
Intermediate, 7 min read. Checked with Scalpel 1.12.8 on .
In short
The Stops tab sets where Scalpel puts your stop, safety net and target on every entry. By default the working stop is 1.5 x the 1-minute ATR (14 bars), the catastrophe net 3 x ATR, and the take-profit 2R above entry, with floors of 20c and 50c. It also holds the Risk (Cents) stop (30c) and the trailing stop: what it follows, and the R at which breakeven and trailing start by themselves (both off by default).
Scalpel's stops are app-monitored: they are not resting orders at Interactive Brokers. Scalpel watches the price and sends a marketable exit when it trades through, so they only work while Scalpel is running and connected. Guide 5.1 explains the model; this page is the reference for every number behind it.
Scalpel is built first for the pre-market, and before the open US exchanges accept limit orders only. A plain stop order turns into a market order when it triggers, so it cannot protect you before 09:30. A stop-limit can be jumped: in a thin, fast pre-market book the price gaps through your limit and the order sits there unfilled while the stock keeps falling. And holding a mental stop while you also read Level 2 and the tape is exactly when traders freeze.
So Scalpel watches every trade itself. When price trades through your stop, it sends a marketable limit sell: in LIVE, 5 cents under the last trade, always flagged for extended hours so it is accepted pre-market (whatever Extended-hours fills on the Trading tab says: that setting only affects entries). If price keeps falling past the limit, or the exit sits unfilled for a few seconds, Scalpel cancels it and sends a new one under the latest price, crossing about 1% from the first retry; after 5 retries it leaves the order working and tells you to check it in TWS. Your stop never shows on the book. The trade-off: Scalpel must be running and connected, and no exit is guaranteed. A fast drop can fill well below the stop. The full story is in guide 5.5.
ATR (average true range) is how far a stock typically moves in one candle. Sizing the stop to it puts a jumpy stock's stop wider and a calm stock's tighter, so normal noise does not stop you out. This stop also sizes the Risk (ATR) buy presets: shares = risk / stop distance.
| Option | What it does for your trading | Default | Allowed values | When to change it |
|---|---|---|---|---|
| Stop = ATR x | Your working stop (the scalp stop that should fill) sits this many ATRs under your entry. | 1.5 | A decimal, for example 1.25 | Lower it (1 to 1.25) to cut losers faster; raise it (2) if normal wiggles keep stopping you out. |
| Catastrophe x | The catastrophe net, a wider crash stop under the working stop, sits this many ATRs under your entry. It is not drawn on the chart. | 3 | A decimal, wider than the stop | Rarely. Keep it about twice the stop multiple. |
| ATR timeframe | Which candles the ATR is measured on. | 1m | 10s, 1m, 5m | 10s for very tight scalps; 5m for slower holds and wider stops. |
| ATR period | How many candles the ATR averages. | 14 | 1 to 999 | Lower (7) to react faster to a stock waking up; higher (20) for a steadier stop. |
| Take profit (R) | An app-monitored target this many R above entry, where R is your stop distance. | 2 | A decimal; 0 turns it off | Set 1.5 or 3 to match how you take profits; 0 if you always exit by hand. |
The settings note reads: "Take profit is an app-monitored target at N x R (the stop distance) above entry; 0 disables it. Drag it on the chart, and drag the +TP handle on the position to add one."
| Option | What it does for your trading | Default | Allowed values | When to change it |
|---|---|---|---|---|
| Stop floor (c) | The working stop is never tighter than this, and it is the stop used before the stock has candle history. | 20 | Whole cents | Lower it if you trade $20 to $50 stocks with very tight stops. |
| Catastrophe floor (c) | The same minimum for the catastrophe net. Always at least 1c wider than the stop floor. | 50 | Whole cents | Rarely. |
The note reads: "Floors apply only until candle history loads, or if ATR resolves tighter." Two guard rails sit on top: on stocks under $20 the floors shrink to 1% of the price (2.5% for the catastrophe net), so a 20c floor never swamps a $3 stock, and no stop sits more than 40% under the price. An ATR wider than 5% of the price per candle is treated as bad data and the floors are used.
| Stock | 1m ATR | Working stop | Catastrophe net | Take profit (2R) |
|---|---|---|---|---|
| $5.00 | 12c | 1.5 x 12c = 18c (floor capped at 5c) | 3 x 12c = 36c | 36c above entry |
| $40.00 | 8c | 12c, raised to the 20c floor | 24c, raised to the 50c floor | 40c above entry |
| $5.00, no history yet | none | floor, capped at 1% = 5c | 12.5c | 10c above entry |
| Option | What it does for your trading | Default | Allowed values | When to change it |
|---|---|---|---|---|
| Stop (c) | With the Risk (Cents) method, every entry's stop sits exactly this many cents under the fill, and each buy button sizes to its risk: shares = risk / stop. | 30 | 1 to 9999 | Set it to the stop you use most. Nudge it per stock with the Stop stepper on the order bar (5c a click), which changes this same setting. |
The note's example: "A $1000 button with a 30c stop buys 3,333 shares." The catastrophe net keeps the same ratio as the ATR stops: at the defaults (3 / 1.5) it sits twice the stop under the fill, 60c for a 30c stop. The full walkthrough is guide 4.2.
A trailing stop follows the price up and never moves down. You turn it on per position with the Trail button or Shift+T, or let it start by itself.
| Option | What it does for your trading | Default | Allowed values | When to change it |
|---|---|---|---|---|
| Trail by | What the stop follows. Same as my stop: each new high pulls the stop up to the distance you entered with (a 30c stop trails 30c behind the high). Cents: a fixed distance behind the high. Percent: a percent behind the high, so it widens as the price climbs. 1-min candle lows: each time a 1-minute candle closes, the stop moves up to just under its low. | Same as my stop | The four modes | 1-min candle lows gives a runner room and gets you out on the first lower low. Cents for a tighter leash than your entry stop. |
| Distance (c) | The trail distance, shown only with Cents. | 20 | 1 or more | Match the stock's normal pullback size. |
| Distance (%) | The trail distance, shown only with Percent. | 3 | 0.1 to 50 | 2 to 5% suits most small-cap runners. |
| Breakeven at (R) | Once you are up this many R, the stop moves to your entry by itself, once. | 0 (off) | 0 or more, decimals allowed | 1 is common: once a trade is 1R in your favour, it cannot become a loser (before slippage). |
| Start trailing at (R) | Once you are up this many R, trailing turns on by itself. | 0 (off) | 0 or more, decimals allowed | 1.5 or 2 lets a winner run without you pressing Trail. |
R is always the stop distance you entered with, so a later trade on another stock never changes how this one trails. The Trail button, the trail hotkey and B for breakeven work at any time, whatever these say. If you turn trailing off on a position, it stays off: Start trailing at (R) does not switch it back on. A stop only ever moves up, so B never pulls down a stop that trailing has already lifted above your entry. More in guide 5.3.
Click Apply or press Enter. Stop, catastrophe and take-profit distances apply to your next entry; a position you already hold keeps its levels (drag them on the chart to change them, guide 5.2). Trailing changes apply to open positions from the next price tick. Adding shares to a position keeps your stop where it is; breakeven then means your new average price.