One of the Best Weapons in Trading

[GreatArkansas]

Have you ever experienced doing trade and ended it up by #HODLING? (You bought a coin and waiting to pump, but unfortunately it dumps, and decided to wait for it until it pumps)
Have you ever experienced liquidated on Margin Trading Exchanges? (Huge red/green wick candle? )

I want to share my weapon against that situation. Meet, STOP-LOSS.
What is Stop-loss?
• Stop-loss is accepting your loss on the trade or you are minimizing your loss or cutting loss before getting rekt in ahead of time.

Why we need to use stop-loss?
Example:

As you can see the example above, you minimize your loss around 5%, because if you didn't exit on your trade or accepted your loss, you can lose a huge amount in the future if the price continues to dump.
Onto your next trade! Always remember that there will be always a good setup and sometimes much better if you learn how to accept your loss.


Where we can use stop-loss?
Let's say your trading style is about support and resistance.
If you have a long entry, the best to put your stop-loss is on below on the support.
If you have short entry, the best to put your stop-loss is on above the resistance.

It's always up to you where you can set your stop-loss, just always remember that when you use it, you are minimizing your loss in ahead of time or once your chart becomes invalidated.


How to use stop-loss?
You can set your stop-loss once you already had your entry, so this order will be executed based on your condition manually entered.
Example on Bitmex:

For example, I bought(long) $500 worth of BTC at the price of $12,000.
I set my stop-loss sell order on $11,500, less $500 on my entry price.
So, once the price of BTC goes below or on $11,500, my sell order executed and I only lost around 4% on that trade.

This is example for Binance of Limit Stop-loss:
You will set an order:

and

Most of the exchanges don't have Market Stop-loss only the Limit stop-loss as far as I experienced different exchanges.

Conclusion
Using stop-loss is not worst at all. Accepting our loss is not bad. Minimizing our loss is absolutely good than maximizing it.
There will be a good trade set-up. Not all the time are good to trade, sometimes the best trade is not to trade.

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[Baronets]

I think you need a stop loss if you are using gearing ( leverage ), but I try a bit of scalping to gain a bit extra over simple cost averaging. I only trade with cash that I have allocated for long term investment purchases, and I never sell coins if it would result in a loss. I just move the coins into a long term HODL wallet, and top up my trading account from my fiat cash pool. Of course this isn't "proper" trading, and I would make more if I used gearing and made the correct predictions, but I don't think I'm good enough to do this, so I play it slow and safe.

This is also predicated on a belief that the long term price trend for Bitcoin is upwards.

[DdmrDdmr]

<…>

One question I do have is the following: from a hands-on experience point of view, once the stop-loss is triggered, what sell values could one really expect to have in practice?

This will I figure depend on the exchange, the number of buy/sell orders at market value and at a fixed price, the network mempool backlog, etc.
Now in moments of high transactionality, a stop-loss triggered sale order at 11,500 $ may effectively be fulfilled for a lower value depending on the above. So my question here is really, from experience, what kind of effective real values are to be expected in relation to the stop-loss figure you set? (perhaps distinguishing between a bearish moment and a bullish one). Or does the system wait for that exact price to be matched, with no margin of tolerance to the value?

What I had in mind behind the above is to understand if a stop-loss could guarantee the exact parametrized value in a steep quick fall situation, or not.

[GreatArkansas]

<…>

One question I do have is the following: from a hands-on experience point of view, once the stop-loss is triggered, what sell values could one really expect to have in practice?

Did you mean on my example above on setting an stop-loss order on Bitmex?
Since in bitmex, there are two kind of stop loss; Market stop-loss and Limit stop-loss

My above example on Bitmex is Market Stop-loss sell order.
The only need inputs on Market Stop-loss are quantity and sell stop-loss price.
Where sell stop-loss price is when the system will automatically set a sell order, example $11,500. Once the price on bitmex/index price goes on $11,500 or below $11,500, a sell order will execute on nearest available price (if there are available orders on $11,500, then it will be executed)

The Limit stop-loss need 3 inputs quantity, limit price, and stop-price.
Where your limit-price is the trigger where the quantity and stop-price will be executed.

Example: Quantity: 600, Limit Price: $11,500, Stop-Price: $11,510.

Once the price of BTC on Bitmex will mark at $11,510 a sell order of quantity:600 stop-price: $11,510 will be placed.

This is example for Binance of Limit Stop-loss:
You will set an order:


and

Most of the exchanges don't have Market Stop-loss only the Limit stop-loss as far as I experienced different exchanges.

I think you need a stop loss if you are using gearing ( leverage ), but I try a bit of scalping to gain a bit extra over simple cost averaging. I only trade with cash that I have allocated for long term investment purchases, and I never sell coins if it would result in a loss.

Well, it is really important on leveraged trading since liquidation will make you cry if you don't have stop-loss.
Yep, it's still up to us if wether we set a stop-loss or not on every trade, especially on non-leveraged trading, but for what I experienced the most, don't have stop-loss will make you no profit at all if it will continue to make a loss. Since your capital/fund for another trade is on the coin you are holding or not cutting the loss on it, so how you will gonna take profits on another trade if in case you have found another good setup?

[dkbit98]

I think that using lower margin is best way to leverage on Bitcoin.
People often have big margins, they dont set StopLoss, so they end up loosing Bitcoins very often.

That is why BitMex and other similar exchanges are now full of Bitcoins

[DdmrDdmr]

<…>

What I really wanted to know is how often and how much below the stop-loss limit an order could be executed, regardless of the exchange being used (i.e. in general terms). That is, despite setting stop-loss parameters, market conditions could in certain circumstances lead to the sell order being executed for a lower value than that set on the stop-loss order.


Let’s place yersterday’s BTC price scenario, where BTC rose something like 500$ and then dropped that same amount in a rather short period of time (12:20 to 12:56 roughly – depending on UTC settings). The question I had in mind was if the system will sell at a lower price than the limit of the stop-loss if this value is no longer available on the market.

i.e.
BTC Price is 11000 $
I place a stop-loss  order at 10950$ (trigger point), with a limit of 10900$.
If the BTC market value drops abruptly, the 10.900$ order may not be feasible to meet, and that opens 2 scenarios:

-   A) The system sells bellow 10.900$ (so I could lose more than intended).
-   B) The system only sells at  10.900$ (so I waits for that value to be met, which it may not).
I figure what goes on is “A”.

[GreatArkansas]

~~~~
BTC Price is 11000 $
I place a stop-loss  order at 10950$ (trigger point), with a limit of 10900$.
If the BTC market value drops abruptly, the 10.900$ order may not be feasible to meet, and that opens 2 scenarios:

-   A) The system sells bellow 10.900$ (so I could lose more than intended).
-   B) The system only sells at  10.900$ (so I waits for that value to be met, which it may not).
I figure what goes on is “A”.

Since you mentioned that you use a limit stop-loss with($10,900), the system will set an order immediately on $10,900 once the price trigger at $10,950.
-Once their are no available orders at $10,900 when you set, it will not be trigger. Since you said it was abruptly, let's say you have sell order placed at $10,900, but on that price, no one want to buy your order, so the price continue to drop, lot of sellers are already above you, let's say some people put an order on $10,850, $10,800 and so on...

So, the answer will be letter B, you will wait the price of bitcoin rise on $10,900 or above so your order placed will be executed.

But if you used the MARKET STOP-LOSS. The answer will  be letter A. I tried before when BTC value drops abruptly, sell market stop-loss on $7,800 and I lost so much, it was executed at around $7,600.

[DdmrDdmr]

<…>

Ok, I think these Q&As complement nicely the OP, giving a view of difference available stop-loss methods and their implication in case of an abrupt swing of market price.

Under more or less extreme cases, the limit stop-loss paradoxically may perform against the better option, when the price dips quickly, the limit stop-loss value is not met by any buyer, and eventually this may lead to selling when the price is rising again (option “B”). More sophisticated methods probably can read this and act accordingly (i.e. abort the sell if limit stop-loss is skipped, but met on a recovering trend).
The market-stop-loss option is what I thought would happen, rendering as a result option “A” with results such as those you mention (an additional 2,56% loss from the intended target sell value).

[Indamuck]

I never like using stop loss, I would rather just ride out the storm instead of letting a stop hunting whale pick up my coins for cheap.  If your in any good coin it will always rebound if you are patient enough to wait it out.

[GreatArkansas]

The market-stop-loss option is what I thought would happen, rendering as a result option “A” with results such as those you mention (an additional 2,56% loss from the intended target sell value).

That's why some margin trading exchanges have this market stop-loss to avoid some liquidation on massive flash dump/pump of a particular coin. And additional, as far as I know, the market-stop-loss has much higher fee compare to limit stop-loss, so they have some advantages and disadvantages.

If your in any good coin it will always rebound if you are patient enough to wait it out.

Yep, we can't really predict it. As I also experienced last few months, I have this particular coin which I bought and I decided not to put any stop-loss after buying it and look at the price now, I already lost 80% if I will sell it now, so I have no choice but to HOLD it until it will come back to my entry price or above, 4months already  .

[samcrypto]

I never like using stop loss, I would rather just ride out the storm instead of letting a stop hunting whale pick up my coins for cheap.  If your in any good coin it will always rebound if you are patient enough to wait it out.

We can still consider this one as long term trading, anyway stop loss I believe is much needed for the day trader because they play on the market at a very short period of time. I do also have my trade loss level before and it works for me especially on a shitcoins. This is the best weapon to prevent you from losing, blessing in disguise probably. Trade with plan, and analysis don't just hold and sleep.

[hd49728]

Stop-loss orders are good, for traders/ investors whom are underterminantly with their trading orders. They usually hesitate too much when trends broken, and price deeply crashes. They hesitate to do stop-loss, just wait hopelessly for price recoveries, even upward trends already broken. Learning how to use stop-loss is essential thing when joining crypto tradings.
One more point, always set up your stop-loss orders with percent of acceptable losses (from entry price) lower than your expected percent of profit-taking price (from entry points). Choosing good entry points, at which probability to see price rising higher than price fallings; and applying those key principles to set up stop-loss and profit-taking orders will help traders/ investors get profits in crypto market.
Personally, I always determine price to do stop-loss and profit-taking before I decide to buy bitcoin/ altcoins.

[MonsterV]

Well indeed stop loss is very important for trading. But I use stop loss only for my daily trading and not for long-term trading. If I trade long term and the results are not in accordance with the analysis then I will buy it back in stages while waiting for the price to rise again. And for my daily trading, I set a 5% loss in each trade.

I never like using stop loss, I would rather just ride out the storm instead of letting a stop hunting whale pick up my coins for cheap.  If your in any good coin it will always rebound if you are patient enough to wait it out.

Will you always wait for the coin to become shitcoin? for me it's ok if you trade on the top coins but if you trade on coins that are only supported by hype, it's very risky if you don't use stop loss.

[omonuyak]

I hardly set stop losses on trading since I came into cryptocurrency trading. I have been trading with long terms views in mind and if I started to used stop lose it will be very impossible for the level not to be stopped and I will keep losing out especially during the noise. In as much as it is very clear that stop loss is one of the best tools in trading, it is very difficult to set it as many people have lost money through that way too.

[carter34]

I have experienced all what Op has said as the pains in trading but to me, stop loss is not the safe heaven. Stop loss eats up your losses that would have come back to profit 

The solution or one of it is to reduce your risk appetite.

[el kaka22]

Yeah, people are really not caring about stop loss as much as they should if they will end up selling anyway. I mean there are holders who do not mind like me that buy at any price at all and just keep it there forever, I am not a fan of selling my coins and I usually just hold as long as possible (except if there is some emergency that requires me to cash out) so that is why I still hold a bunch of coins, some of them even dropped like hell but I am still keeping them.

However, at the same time I do not understand people who sell very low, if you were aiming at selling that low why didn't you just put a stop loss and sold for a lot higher from what you end up selling it at. If anyone decides that they would be willing to sell when price falls %20, should put a stop loss at %5 as well to make sure they don't lose that much.

[Distinctin]

This is a good weapon for short term trading, but honestly if I use stop loss on my investment, I would not be down right now with my portfolio but not regretting it. When I say the word "HOLD" and we mean it, we won't worry regardless of what will happen to the price as we have a big target of profit.
Still I'm proud to say that I "HODL" despite of the big fall after 2017.

[hd49728]

Within the next five days, that is important period for bitcoin. Personally, I already made my stop-loss and profit-taking orders.
Like that (taking profits at $13300, while cutting loss at $10800):

I also suggest other newbie crypto-traders to do this. For experts, I don't mention about them here, because they actually can make better orders than mine.

[Jamjamz30]

Have you ever experienced doing trade and ended it up by #HODLING? (You bought a coin and waiting to pump, but unfortunately it dumps, and decided to wait for it until it pumps)
Have you ever experienced liquidated on Margin Trading Exchanges? (Huge red/green wick candle? )

I want to share my weapon against that situation. Meet, STOP-LOSS.
What is Stop-loss?
• Stop-loss is accepting your loss on the trade or you are minimizing your loss or cutting loss before getting rekt in ahead of time.

Why we need to use stop-loss?
Example:

As you can see the example above, you minimize your loss around 5%, because if you didn't exit on your trade or accepted your loss, you can lose a huge amount in the future if the price continues to dump.
Onto your next trade! Always remember that there will be always a good setup and sometimes much better if you learn how to accept your loss.


Where we can use stop-loss?
Let's say your trading style is about support and resistance.
If you have a long entry, the best to put your stop-loss is on below on the support.
If you have short entry, the best to put your stop-loss is on above the resistance.

It's always up to you where you can set your stop-loss, just always remember that when you use it, you are minimizing your loss in ahead of time or once your chart becomes invalidated.


How to use stop-loss?
You can set your stop-loss once you already had your entry, so this order will be executed based on your condition manually entered.
Example on Bitmex:

For example, I bought(long) $500 worth of BTC at the price of $12,000.
I set my stop-loss sell order on $11,500, less $500 on my entry price.
So, once the price of BTC goes below or on $11,500, my sell order executed and I only lost around 4% on that trade.

This is example for Binance of Limit Stop-loss:
You will set an order:

and

Most of the exchanges don't have Market Stop-loss only the Limit stop-loss as far as I experienced different exchanges.

Conclusion
Using stop-loss is not worst at all. Accepting our loss is not bad. Minimizing our loss is absolutely good than maximizing it.
There will be a good trade set-up. Not all the time are good to trade, sometimes the best trade is not to trade.

I still got confused on you explanation, meaning all I need to is to set the amount in which I think I will be loss. At least if goes down rapidly I am safe for the huge loss. Is that what you're talking about? Just all I know is there many sellers I will sell then if there many buyers I
will buy coins, just simple as that.

[iMark]

Minimizing the loss while doing trading is one of the important factor to be successful trader but people regrets their loss and give up when they have the lots of opportunities to be missed on the next trades.Always watch the market like hawk and hit the most successful trade if you are lucky enough.

Of course its important, because sometimes the price falls very deep, and if you don't immediately make a choice then you will suffer greater losses and of course it will be very bad for the stability of your wallet finances. but you are right, it does not mean you have to do stop loss every time prices fall, because not always falling prices will bring bad things, because it happened for a while. You must be like an hawk who is good at seeing opportunities