Using Stop Loss in day trading?

[thecodebear]

How do you guys use stop losses in day trading? Or does it only really work for long trading like swing trading?

I don't use stop losses, but of course that causes me to lose a lot of money on any deep correction, like on Black Thursday last month. I don't use it because I can't tell you how many times I'll enter a trade and then the price drops before coming back up. If I were to put in a stop loss to protect against major corrections a significant portion of my trades would just get sold for a loss just due to the regular volatility of the market.

Do any of your day traders out there successfully use stop losses without having them just liquidate your positions for losses a bunch of the time? Or do you have some strategy that even though that happens often you still come out ahead by sometimes being able to get back in slightly lower after the stop loss completes?

[1714995073]

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[1714995073]

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[maxreish]

Been using stop loss since I started trading. Amd yeah it can be used in day trading, swing or margin. There are few times I forgot to execute some stop loss and that made my entries being liquidated. Using stop loss can actually be a big help. It reduces your huge loss and prevent from liquidating your entry.
 
 If you are not using it, there is a higher chance that you are going to liquidate your trades because of that reason you have mentioned, "volatile market". Try to execute it in every trades you're going to have. I can tell you it is useful. Afterall, it is not difficult to learn how to use stop loss.

[minairia3]

Do any of your day traders out there successfully use stop losses without having them just liquidate your positions for losses a bunch of the time? Or do you have some strategy that even though that happens often you still come out ahead by sometimes being able to get back in slightly lower after the stop loss completes?

The strategy there is you need to know what possible direction the market goes.

Of course this include using technical analysis. If you are a busy person and I suggest that you dont use margin and future features cause it might be risky for you not to monitor the market movement.

But if you are confident hitting your market price then good for you. For your sake, always use stop loss cause the market is volatile and if you see that it goes down fast or up depend on your position should be aware of clicking the stop loss.

[Assface16678]

Been using stop loss since I started trading. Amd yeah it can be used in day trading, swing or margin. There are few times I forgot to execute some stop loss and that made my entries being liquidated. Using stop loss can actually be a big help. It reduces your huge loss and prevent from liquidating your entry.
 
 If you are not using it, there is a higher chance that you are going to liquidate your trades because of that reason you have mentioned, "volatile market". Try to execute it in every trades you're going to have. I can tell you it is useful. Afterall, it is not difficult to learn how to use stop loss.

Today there are a lot of people thinking that after gambling is trading is one of the most profitable ways and I think it is not true because trading consists a lot of ideas and strategy to work in because first, we need to have an introduction how does the trading works by that we can learn about the upwards and downward trends of the coin, some of these examples of vocabulary is the bullish market, bearish market, resistance and support those are the common things you will hear while you are in the introduction of trading. Also, it is better if we are going aware of the coin we are going to use when we make trading because sometimes people use the bitcoin for short term trading that causes losing their trade too.
If you are going to make a trade for short term trading like daily, weekly, and monthly go with the altcoins and if you want for a long term investment goes for the bitcoin this may help you a lot to make earnings. Next, find some trading platform that is suitable for your needs because it can help you see them updated on the market price sometimes many people use the candlestick because it is easier to identify the movement of the coins. If you always fail your trading it is better to make a lot of analysis so you may easily identify what are your mistakes to avoid next time trades.

[joniboini]

From your story of losing multiple times due to volatility, I believe you should learn and improve your skill in setting up your stop-loss. It's a nice set up to have even if you just scalp here and there. Your problem is probably finding the right place or ratio to put your SL on your trade.

A trader that I know said that stop-loss should be proportional to the reward that you want to achieve. On top of that, only trade if you find a pattern so you can set your stop-loss and risk/reward ratio nicely. Buying on top is not a good trade regardless of where you put your stop-loss as in most cases the price will fell for more than 20-30%.

[FlamingFingers]

Do any of your day traders out there successfully use stop losses without having them just liquidate your positions for losses a bunch of the time?

Stop loss is good in using so as to avoid huge loss from trading,  but it seems to me that exchanges hunt for stop loss,  immediately after your stop loss got triggered, the pump begins. and take note that when trading on future ensure you don't use a huge leverage position so as not to get liquidated easily,  a tight stop with low leverage position does not liquidate easily

[chip1994]

How do you guys use stop losses in day trading? Or does it only really work for long trading like swing trading?

Do any of your day traders out there successfully use stop losses without having them just liquidate your positions for losses a bunch of the time? Or do you have some strategy that even though that happens often you still come out ahead by sometimes being able to get back in slightly lower after the stop loss completes?

For trading, nothing is for sure. Everything is just a probability so we need to use the stoploss command to avoid excessive loss. never trade without using stoploss, you will never know how the market will move. but there is a way you can set stoploss command far from the entry point. It's a low-leverage bet, it won't make us lose too much when the market is reversed but when we win we get a lot of money.

[Sadlife]

Same here, i dont use stop losses in trading Bitcoin because if you have eyes in the price short term corrections isn't really a big deal and a cause to panic. Im a swing trader kinda type for now, im longing my Bitcoins because i know holding it yield most profits in the long run. And news flash we're extremely oversold just like the past Bitcoin halving.

[spike420211]

Two weeks in the next branch there is a discussion of the use of stop loss, maybe you will be interested.
One of the Best Weapons in Trading

By the way, I use both stop loss and stop profit. The latter principle is the same, with the only exception that you take part or all of the profit, thereby minimizing the risk of loss of profit.

[bitgolden]

You can still use it in day trading but it is more attached to long term trading because in day trading you are already basically on the clock and watching everything and as soon as you see a move you trade so you do not really need something automatic to tell you what to do, that is of course if you are actually online constantly which you should be if you are a day trader, however if you are not you could always use it, hell you can do it when you go for a toilet break if you want to be extra careful.

However long term investment is not like that, you are not constantly online and you could be asleep when something happens, so having stop loss basically prevents you from a huge loss when you are not actively doing anything which long term investors are rarely ever.

[thecodebear]

Two weeks in the next branch there is a discussion of the use of stop loss, maybe you will be interested.
One of the Best Weapons in Trading

By the way, I use both stop loss and stop profit. The latter principle is the same, with the only exception that you take part or all of the profit, thereby minimizing the risk of loss of profit.

Cool I checked out the link.


Can someone explain to me exactly how limits work in stop loss orders. I was a bit confused by the guy explaining stuff in that thread.

Specifically, I'm using Coinbase Pro. When you go to stop order there's the coin amount, the stop price, and the limit price.
So from what I understand the Stop Price is what triggers your stop order. But I'm confused is the stop limit price supposed to be above or below the stop price.

For instance, let's say I'm trying to protect my trades from a crash so I want to do a stop loss sell. If I bought Bitcoin for $7000, and I wanna limit losses by selling if it hits $6600. So I put my stop price at $6600. From what I understand that will just trigger my stop order to then make a market order once the limit price is hit. So does my limit order need to be higher than my stop price (meaning the price would have to go up after hitting my stop price in order for my sell order to get hit)? Or can I put the limit price also at $6600 so it'll just trigger the market order right there. Can I put my limit order anywhere - above, equal to, or below my stop price?

Basically, is the way it work that once the stop price is hit, Coinbase will make a market sell order (or buy order if I'm buying) wherever I put my limit price at, doesn't matter if its the same, below, or above the stop price? So like if I thought dropping to $6600 meant the price was gonna crash, but I thought it'd have a dead cat bounce before crashing more, I could put my limit order at $6650. Or if I just wanted to sell at $6600 I would put both stop price and limit order at $6600? And I guess the lower limit order would be more used for buying in the opposite scenario to my first scenario here, if there is a pump but I think at some point it will correct a little bit, I could put a stop limit at $7500 as I think that is a clear indicator that the price will keep rising, but I think it'll definitely correct to $7400 before pumping further so I put my limit order at $7400?

Am I understanding how stop orders work correctly?

[thecodebear]

Oh wait I think I get it now.

In a stop loss (a stop sell order), the stop price triggers your order. Your order is your limit price. If you're selling and you put the limit price above the stop price, that means your sell order will be put on the order book, so the price will have to rise to hit it after the price has already hit the stop price. If you put the limit price below the stop price, that means your order will be a market order instead of a limit order, and the limit price you set is the furthest amount from the stop price you want your order to execute. Basically it'll execute as a market order only at the limit order or higher, just depending on how long it takes the exchange to execute your sell - depending on how many other market orders are in line ahead of you.

So a stop price of $6600 and a limit price of $6570 means when the price hits $6600 your account places a market order, this order will execute at whatever the price is at when the exchange gets around to executing it, but as long as the price hasn't gone below $6570. If it has gone below $6570 by the time the exchange gets around to executing your order, then you are out of luck and it won't sell, and I'm not sure but maybe if that is the case then it will put your $6570 sell as a limit order on the books??

[justdimin]

For day trading stop loss is very must but it should be at minimum level like 10% or 25% based based on your risk estimations. You may quit at stop loss and may enter again in next hour when your technical analysis support you to do so. But, if we do not use stop loss then we may need to keep on waiting which must be killing the concept of day trading. Day trading is all about finding the results within a day hence using stop loss at minimum risk levels makes sense.

Personally I do not day trade cryptos but I was into day trading commodity derivatives. For the newbie traders, it would be much better to day trade with least capital and then may think about using stop loss things. Because with small capital you may get exited before you think about as crypto fluctuations are too wide now a days.

[Stedsm]

I think you are misunderstanding the concept of stop loss, it's not about making you lose a bunch but making you lose less than what you may lose in a losing position that you keep open for a longer timeframe (by longer, I mean that you just keep it open during a few extra hours and just keep watching it, hoping for the markets to get into your direction but it just eats your entire capital). I believe that even during day trading, you need to put a stop loss (at around 20-40% whichever suits your appetite) and keep watching your position. If it gets 10% in profits, you should move your SL up 10% too because that will become a trailing stop that even if gets hunted, you won't lose much. If you're seeing a lot of volatility in the markets, trust me, it's better to leave it aside and do something else, meaning - don't trade at all because market moves either direction/s during higher volatility and you may be in profit, but just before reaching your profit, a wick shows up and puts you into loss.

[thecodebear]

I think you are misunderstanding the concept of stop loss, it's not about making you lose a bunch but making you lose less than what you may lose in a losing position that you keep open for a longer timeframe (by longer, I mean that you just keep it open during a few extra hours and just keep watching it, hoping for the markets to get into your direction but it just eats your entire capital). I believe that even during day trading, you need to put a stop loss (at around 20-40% whichever suits your appetite) and keep watching your position. If it gets 10% in profits, you should move your SL up 10% too because that will become a trailing stop that even if gets hunted, you won't lose much. If you're seeing a lot of volatility in the markets, trust me, it's better to leave it aside and do something else, meaning - don't trade at all because market moves either direction/s during higher volatility and you may be in profit, but just before reaching your profit, a wick shows up and puts you into loss.

haha no I already understand what it is for. I was asking more do day traders find it useful is or does it make sense more just for longer trades like swing traders, and trying to understand exactly how it works on Coinbase Pro, but I think I figured that out on my own now.

[btcholder]

Stop loss is a method which created for traders to improves their trading skill so yeah it's useful for any kinda trading (day/swing). You can't sit all the day in front of your laptop or mobile. So using stop loss method is a good idea when you are not in online (even for 5 minutes). Here is an article i saw where you can find how to use stop loss properly. Or you can visit this channel where you are able to see practically how to use it properly.

[milewilda]

For day trading stop loss is very must but it should be at minimum level like 10% or 25% based based on your risk estimations. You may quit at stop loss and may enter again in next hour when your technical analysis support you to do so. But, if we do not use stop loss then we may need to keep on waiting which must be killing the concept of day trading. Day trading is all about finding the results within a day hence using stop loss at minimum risk levels makes sense.

Personally I do not day trade cryptos but I was into day trading commodity derivatives. For the newbie traders, it would be much better to day trade with least capital and then may think about using stop loss things. Because with small capital you may get exited before you think about as crypto fluctuations are too wide now a days.

10% SL would be the maximum when it comes to day/active trade yet we know that established coins like on top ranks will most likely have that 2-5% movement for a normal day
but if there were some news then expect that it would break or trigger out that SL. 25% is too much imho or just too deep.When i do active trade 5% would be maximum.Yes, it might be thin but
i cant afford that much, there are trades that doesnt need some SL when you do swing/trend ones so its  would vary or depend on you.

[TitanGEL]

For day trading stop loss is very must but it should be at minimum level like 10% or 25% based based on your risk estimations. You may quit at stop loss and may enter again in next hour when your technical analysis support you to do so. But, if we do not use stop loss then we may need to keep on waiting which must be killing the concept of day trading. Day trading is all about finding the results within a day hence using stop loss at minimum risk levels makes sense.

Personally I do not day trade cryptos but I was into day trading commodity derivatives. For the newbie traders, it would be much better to day trade with least capital and then may think about using stop loss things. Because with small capital you may get exited before you think about as crypto fluctuations are too wide now a days.

10% SL would be the maximum when it comes to day/active trade yet we know that established coins like on top ranks will most likely have that 2-5% movement for a normal day
but if there were some news then expect that it would break or trigger out that SL. 25% is too much imho or just too deep.When i do active trade 5% would be maximum.Yes, it might be thin but
i cant afford that much, there are trades that doesnt need some SL when you do swing/trend ones so its  would vary or depend on you.

For day traders, the stop loss should be tight in order to manage the risks very well. For me the ideal invalidation level or the stop loss level will be -4%. If our bias didn't happen then it is better to cut our loss immediately in order to protect our capital. Having a stop loss is not required but it is important especially if you want to be a better trader. Discipline can build by following our stop loss so it is really important to have stop loss because it is part of our risks and management.

[rathaha10]

Do any of your day traders out there successfully use stop losses without having them just liquidate your positions for losses a bunch of the time? Or do you have some strategy that even though that happens often you still come out ahead by sometimes being able to get back in slightly lower after the stop loss completes?

To me, it's a two way things as you can actually be saved with or you can run unless as a result of little market corrections. To be honest, stop loss is not really flexibe for day/swing trading compared to long term trade of hodl as the trader will always be on the lookout while on day trading. However, the advantages of using stop-loss on which ever trade type is more than the disadvantage as all you could lose while using stop-loss is potential profits where as, without stop-loss  you could get Rekk of your Investment

[rexxarofmoknathal]

I even use stop losses during day trading, though I mostly trade longer trends.

For the most part, I'll use a stop loss as a take profit option on the exchange platform I'm using. I'll do this when a cryptocurrency has a large bullish intraday trend and is likely to backpedal the next day or so.

Dont set them too tight though or you'll get caught out by volatility.