# Settings: Stops

> Every option on Scalpel's Stops tab: ATR multiples and period, stop floors, take-profit R, the Risk (Cents) stop and trailing, with defaults and ranges.

Source: https://scalpeltrade.com/guides/settings-stops
Guide 11.3, Settings reference. Intermediate, 7 min read.
Checked with Scalpel 1.12.8 on 2026-10-15. By Scalpel Team.

**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](https://scalpeltrade.com/guides/how-stops-work) explains the model; this page is the reference for every number behind it.

*Screenshot: The Stops tab as it opens: the ATR model and take profit, the cent floors, and the Risk (Cents) stop.*

## Why Scalpel watches your stops itself

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](https://scalpeltrade.com/guides/settings-trading) 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](https://scalpeltrade.com/guides/premarket-stops).

## Stops sized to ATR volatility

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."

## Stop floors (cents)

| 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.

### Worked examples

| 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 |

## Risk (Cents) sizing

| 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](https://scalpeltrade.com/guides/trade-fixed-dollar-risk).

## Trailing stop

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.

*Screenshot: Scrolled down to Trailing stop, with the Trail by list open.*

| 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](https://scalpeltrade.com/guides/breakeven-and-trailing-stops).

*Screenshot: Trail by Cents shows a Distance (c) field. Here: 20c behind the high, breakeven at 1R, trailing from 1.5R.*

## When changes take effect

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](https://scalpeltrade.com/guides/drag-stops-and-targets)). 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.

## What can go wrong

- **The stop-out cost more than 1R.** The stop fires a marketable exit when price trades through it; in a fast drop or a halt it fills below the level. A wider catastrophe net does not prevent that. Size for it ([guide 7.1](https://scalpeltrade.com/guides/daily-loss-limit)).
- **Stops are tiny on a fresh symbol.** Before candle history loads, the floor (capped at 1% of the price) is used. Wait a few seconds after loading a symbol before you enter.
- **Scalpel was closed.** Nothing watches the stop. Keep Scalpel running and connected while you hold a position.

## Questions

**What is the default stop in Scalpel?**

1.5 x the 1-minute ATR over 14 candles, never tighter than 20 cents (or 1% of the price on stocks under $20). Risk (Cents) entries use a fixed 30 cents instead.

**What is the catastrophe net?**

A second, wider stop under the working stop, 3 x ATR by default with a 50 cent floor. If the working stop's exit somehow does not clear the position, the net is there to get you out. It is not drawn on the chart.

**How do I turn off the take-profit?**

Set Take profit (R) to 0 and click Apply. You can still add a target to a position by dragging the +TP handle up from the entry line.

**Do the stops work if Scalpel is closed?**

No. They are app-monitored, not orders resting at Interactive Brokers, so they only work while Scalpel is running and connected.

**Does changing these settings move my open stop?**

No. Stop and target distances apply to your next entry. Trailing settings apply to open positions straight away.