The retail trading community is highly familiar with the sniper trading approach — a widely taught, mechanical system that focuses on precision, strict rules, and back-testing. It’s simple to market and appeals to new traders who crave structure and certainty.
But is it really the best way to trade?
The Appeal of Mechanical Trading Systems
Sniper-style systems provide traders with clear rules and commandments, such as:
Never average losers.
As Paul Tudor Jones famously said, ‘Losers average losers.’
If you’re already at maximum position size, attempting to martingale out of a losing trade can permanently damage your account.
This rigid structure comforts beginners but often leads to binary outcome thinking: entry, stop, target. While this satisfies the brain’s need for control, it can discourage adaptation to changing market contexts.
In the Academy, however, we generally suggest this is true, purely because we operate solely in mid and large cap stocks, mainly US, where there are plenty of opportunities… so why would you want to be averaging down in a losing investment?
The Problem With the “Free Trade” Myth
Many traders believe that moving a stop-loss to breakeven once the trade shows a slight profit is a prudent risk move. It isn’t. In fact, you may be reducing your expected value (EV).
At +10 pips, there might be a 66% chance of hitting your target and a 33% chance of stopping out. By moving your stop to breakeven, you effectively shift probabilities and weaken your trade’s edge. You sacrifice open profit for psychological comfort – an illusion of safety.
In most real-world setups, your edge is strongest at entry and declines as price moves away. Moving to breakeven too early compounds that decay.
Using Data-Driven Tools to Manage Trades
Instead of arbitrary stop movement, use objective measures like the Average True Range (ATR) or magnetic price points to manage volatility and trade targets. Incorporating these tools can help stabilize your strategy and prevent emotional decision-making.
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ATR-based stops scale naturally with volatility.
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Ensuring you maximise your position by exiting on the downside and not on a subjective price target you think the market will stop at.
Beyond the Sniper: A Range-Based Approach
Let’s reframe the trade through an example.
You have a $100,000 trading account and risk 1.5% per trade. Instead of taking one ‘all-in’ sniper shot, consider scaling into a range position to reduce stress and exposure.
Example: AUD/USD short setup
You believe AUD/USD is bearish around 0.7145 and plan to sell. Instead of executing full size at once:
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Place limit orders in smaller tranches every 5 ticks above your key level.
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Use a volatility-based stop (e.g., ATR multiple) to adjust position risk.
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If not fully filled, add only when market momentum turns in your favor.
This range-based execution method rewards patience, improves fill quality, and reflects evolving conviction with the market trend. It also minimizes the ‘puke point’ – the emotional urge to close early.
This can work in any asset class, but it’s important to note the behavioural differences of each asset class.
For instance, FX is mean reverting. This means it’s more likely the market will average back to some sort of range that it started from over x period.
Whereas US stocks trend harder which could permit you to be either more or less aggressive depending on the overall market context.
For instance, if the broader market is rallying hard and you’re looking at a single stock, it might permit you to really be aggressive now based on a ‘rising tide lifts all boats’ notion.
But if the overall market is softer but you like the single stock idea, you might want to be in with smaller size and wait for momentum to take over.
Trading Mindset: Adapting to Uncertainty
Markets change. What worked before may not work again. The skill in trading lies in adaptability – combining structure with flexibility.
Rigid adherence to outdated systems can hinder growth. Understanding risk, volatility, and context allows for dynamic management rather than mechanical, fear-driven reactions.
In short, think less like a sniper aiming for one perfect shot and more like a strategist managing multiple probabilities.