The psychology of stoploss

[gabbie2010]

Stoploss is just good when you are just making out some short trades or you do actively dealing with the price in the market but if its not then you would definitely not needing this.
You could eventually tell when you are on the situation where it is really that suitable for you to use or not but on that case then it would really be not much needed
so it does depend on you because you are the ones would really be able to tell if its significant for you or not.

Well, its really up to us if we will use stoploss  or the other way around. Some active traders are not even using this because they are more on alerts that will give significant prices on the market. They know exactly when to buy and sell. But honestly, i still prefer to use stoploss because its a very helpful tool for us active traders that we can prevent from losing such a huge amount. If we think the prices are already not bearable for us, then maybe we should start setting stoploss.

For professional traders whose job is trading, I think that even if they don't set a stop loss, of course they will use a manual cutloss, because they have a lot of time to monitor the market. and when using a stop loss, they will place a distance from the lowest support, thus giving the market room for movement, because the market habit is to just grab the stop loss and then reverse direction

Personally I monitor my trades and have a virtual form of stop loss once the price reach the zone I manually close the trade likewise a virtual and calculated Take Profit, I agreed with the OP that stop loss is very important tool to reduce risk, it help traders a lot to cut losses of course prices of cryptocurrencies are very be volatile portfolio can be liquidated very fast if not Stop lossed appropriately  traders who chooses not to use it does so with experience, I don't think it advisable for a newbie trader not to use a stop loss.

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[tvplus006]

...One benefit is your just loss a little part and you can carry on with your trade, after all trading is about profit and loss. This is a good mentality to succeed...

You cannot use stop loss if you do not have the skills to trade and do not have a trading strategy. A small loss at a stop loss will be only if you open an order in a long position from support or a short position from resistance. Thus, it is necessary to compare the risks and profits from the expected transaction.

[milewilda]

...One benefit is your just loss a little part and you can carry on with your trade, after all trading is about profit and loss. This is a good mentality to succeed...

You cannot use stop loss if you do not have the skills to trade and do not have a trading strategy. A small loss at a stop loss will be only if you open an order in a long position from support or a short position from resistance. Thus, it is necessary to compare the risks and profits from the expected transaction.

True, you wouldnt really able to understand on how stop loss works if you dont really have any idea on what you are doing.This isnt something an indicator that you could just place up and then
just make it work because there would be guidelines on when and how or where you should place those SL's and wont be making out some movements which are way too careless because
stop loss is something that is needed for you to place on on specific time and according on the risk that you could able to bare off.

[otundebis]

Stop loss usage has been quite popular especially among traders that combined daily job with trading schedule.  Stop loss should be used if you are not going to stay at monitoring your trades.  It's however important to note that during high traffic be it bull or bear market,  stop loss can fail and this should be factored in to the using of stop loss!

[wxa7115]

I'm believing that many traders here don't like using stop loss and the reason is just within our first guess, they don't want the stoploss to take them out.
In my own situation , I also didn't like that idea of getting to loss to stoploss but my orientation have changed towards that because stop loss is better used than not to be used.  One benefit is your just loss a little part and you can carry on with your trade, after all trading is about profit and loss. This is a good mentality to succeed. If you are in the habit of readjusting your stoploss and take it further, you can stop that because the price can chase you there

For newbie traders and more experienced traders, I do also believe you having the dilemma of using or not using stoploss especially when it takes you out frequently but to such, the problem may be with your trading strategy and not stoploss.

So what is your challenge to using stoploss?

That is the main reason people do not want to use a stop loss, they make a trade and then once it hits the stop loss it gets you out of the market and then it goes above it once again and people get mad that their trade was closed with a loss, as people not only care about the money they make but they also care about their winning rate.

However the problem is that while in many occasions the price of the asset you are trading will recover and go above the stop loss, there are some instances in which the price will keep crashing and now a loss which could have been small now it is way larger than that, and now your capital has suffered a damage so big that it is fair to wonder if it will ever recover.

[Natalim]

...One benefit is your just loss a little part and you can carry on with your trade, after all trading is about profit and loss. This is a good mentality to succeed...

You cannot use stop loss if you do not have the skills to trade and do not have a trading strategy. A small loss at a stop loss will be only if you open an order in a long position from support or a short position from resistance. Thus, it is necessary to compare the risks and profits from the expected transaction.

True, you wouldnt really able to understand on how stop loss works if you dont really have any idea on what you are doing.This isnt something an indicator that you could just place up and then
just make it work because there would be guidelines on when and how or where you should place those SL's and wont be making out some movements which are way too careless because
stop loss is something that is needed for you to place on on specific time and according on the risk that you could able to bare off.

Using of stop loss will never meet its own goal if the trader alone does not know how it works and how it is even useful. Stop loss is designed to limit an investor's loss on a security position. If you put a stop loss 10% down from the price you bought it, then you are limiting your loss not more than 10%. Still, i don't understand why most of traders forget to set a stop loss where in fact, it's one way of avoiding more losses and just maximize your expected profits. This will help you to carry out your losses knowing trading won't make you a gainer without experiencing losses.

[Jawadu]

So what is your challenge to using stoploss?

I am always using stop loss on my trades because I am a day trader and scalping trader, I trade crypto, stocks, and a little bit in forex (still learning). It was a challenge for me to use stop loss at the beginning because I thought I would lose a lot of profit if a fake move appeared and touch my SL target, but now I am using stop loss because sometimes I will have other works to do apart from trading, so the SL will help me to protect my money.

[Quidat]

...One benefit is your just loss a little part and you can carry on with your trade, after all trading is about profit and loss. This is a good mentality to succeed...

You cannot use stop loss if you do not have the skills to trade and do not have a trading strategy. A small loss at a stop loss will be only if you open an order in a long position from support or a short position from resistance. Thus, it is necessary to compare the risks and profits from the expected transaction.

True, you wouldnt really able to understand on how stop loss works if you dont really have any idea on what you are doing.This isnt something an indicator that you could just place up and then
just make it work because there would be guidelines on when and how or where you should place those SL's and wont be making out some movements which are way too careless because
stop loss is something that is needed for you to place on on specific time and according on the risk that you could able to bare off.

Using of stop loss will never meet its own goal if the trader alone does not know how it works and how it is even useful. Stop loss is designed to limit an investor's loss on a security position. If you put a stop loss 10% down from the price you bought it, then you are limiting your loss not more than 10%. Still, i don't understand why most of traders forget to set a stop loss where in fact, it's one way of avoiding more losses and just maximize your expected profits. This will help you to carry out your losses knowing trading won't make you a gainer without experiencing losses.

Its just common sense that it do like on something a tool but you dont know on how to use it then its really no sense at all.Im even sure that lots of traders doesnt really know about stop loss but i cant really blame them off because most of the time when people do make out spot trades and whenever they do lost up their positions they do tend to hold and not tending to cut loss which why these indicators are really not much known
on every trader because there's a specific type which a trader do commonly use on certain conditions.

[TelolettOm]

I never think that stop loss be a challenge, I just set it because I need it to manage the loss and also risks that I am probably getting while trading in the future (mostly).
And about trading in spot, I only a few times also using SL, moreover if it is a good or top coins, I will prefer to wait for increasing price. But once more, it doesn't mean that never using SL for a spot. Sometimes, it is also good to use SL because I want to manage the funds in order to ensure to lose small and then get another chance in another trading

[awik p]

I never think that stop loss be a challenge, I just set it because I need it to manage the loss and also risks that I am probably getting while trading in the future (mostly).
And about trading in spot, I only a few times also using SL, moreover if it is a good or top coins, I will prefer to wait for increasing price. But once more, it doesn't mean that never using SL for a spot. Sometimes, it is also good to use SL because I want to manage the funds in order to ensure to lose small and then get another chance in another trading

I think it depends on our trading period, if we are trading long term, I don't think that using stop losses is also not a problem, but for short term daily trading, I think stop losses are mandatory, because we only take advantage of the narrow space to look for opportunities to profit from there

[tvplus006]

I never think that stop loss be a challenge, I just set it because I need it to manage the loss and also risks that I am probably getting while trading in the future (mostly).
And about trading in spot, I only a few times also using SL, moreover if it is a good or top coins, I will prefer to wait for increasing price. But once more, it doesn't mean that never using SL for a spot. Sometimes, it is also good to use SL because I want to manage the funds in order to ensure to lose small and then get another chance in another trading

I think it depends on our trading period, if we are trading long term, I don't think that using stop losses is also not a problem, but for short term daily trading, I think stop losses are mandatory, because we only take advantage of the narrow space to look for opportunities to profit from there

In order to use a stop loss, a trader must change psychologically, accepting the fact that in addition to profitable trades, there will necessarily be unprofitable ones. In any case, it is better to get a small loss and open an order at a better price than just waiting for the price to return to its original values.

[Mpamaegbu]

but with various market manipulation issues, it makes me less confident in applying stop losses, in fact their effectiveness cannot run normally.

Every exit or take profit (TP) level is a psychological level the same way every stoploss (SL) level is. Traders are humans subject to emotions the same way platform and exchange owners are. We know of instances of trade manipulations from exchanges and platforms because their owners follow the same psychological levels traders follow. For instance, most traders are looking at $100,000 as the next strong resistance level for Bitcoin. With that, you will see a lot of them selling off around that level even if it seems that price could break it at once. If there are going to be traders who will want to short from that level with SL placed slightly above that level could've their SL hit too if it spikes around there, either by genuine price action (PA) or exchange manipulation. The wise thing to do is to allow one's SL breathe by giving it a wide margin while placing it. Don't place your SL close to any psychological level. Space it, and you will be fine.

[buwaytress]

Never got into trading except when I need to, and then spot markets is just where I go... Although am not averse to setting limit orders very near the spot if I am not in a rush, just really because the fees tend to be a lot better for maker. But when I dabbled in forex in the mid 2000s every order had a stop loss, trailing even if going long. Can't really get why anyone would trade without that safety net.

I do imagine Bitcoin volatility makes it even harder to decide as stop losses that are too tight are liable to hit in any condition.

[Dewi Aries]

Most of my time is in front of computer, maybe stop loss for me is when i'm sleep. Not want to said that i confident with my trading style, but to be honest amount that i use in future trading is really small, and people maybe laugh at it. But that is time i use stop loss, because when i sleep i can't control market, and for me i prefer to set SL and TP because not want to miss a moment or maybe lose all and get liquidated.

[geegaw]

I never think that stop loss be a challenge, I just set it because I need it to manage the loss and also risks that I am probably getting while trading in the future (mostly).
And about trading in spot, I only a few times also using SL, moreover if it is a good or top coins, I will prefer to wait for increasing price. But once more, it doesn't mean that never using SL for a spot. Sometimes, it is also good to use SL because I want to manage the funds in order to ensure to lose small and then get another chance in another trading

Not a preeminent challenge but it's also not one that many people like to set up because stop loss is a criterion of admitting failure, our assets that are growing big will turn small, one more rule in trading is that the loss figure will be symbolic and not officially counted in our assets when we do not have stop setups, more precisely, the losing price is just a number that will be updated regularly, addition and subtraction are daily happenings. Traders hate such a symbolic loss, they love to win and are stubborn about losing, not believing the market will be like that.

[SquallLeonhart]

Every exit or take profit (TP) level is a psychological level the same way every stoploss (SL) level is. Traders are humans subject to emotions the same way platform and exchange owners are. We know of instances of trade manipulations from exchanges and platforms because their owners follow the same psychological levels traders follow.

I wouldn't really compare all three together. Exit means you exit, doesn't mean you make a loss or not, it could be a loss or it could be a profit, it is just exit, whereas TP is literally taking profit, which means it needs to be a profit, when you lose then you can't TP since there is no profit to take, and stop loss (even though it has a loss word in it) doesn't need to be a loss, you could buy at 40k, it could go to 54k then you could put a stop loss at 50k and end up selling it there when it crashes, so overall you made a profit, the loss in there means stop the continuous loss that may happen if it is not stopped, even profit loss included. So all three are not the same thing, there are small differences.

[Lanatsa]

Every exit or take profit (TP) level is a psychological level the same way every stoploss (SL) level is. Traders are humans subject to emotions the same way platform and exchange owners are. We know of instances of trade manipulations from exchanges and platforms because their owners follow the same psychological levels traders follow.

I wouldn't really compare all three together. Exit means you exit, doesn't mean you make a loss or not, it could be a loss or it could be a profit, it is just exit, whereas TP is literally taking profit, which means it needs to be a profit, when you lose then you can't TP since there is no profit to take, and stop loss (even though it has a loss word in it) doesn't need to be a loss, you could buy at 40k, it could go to 54k then you could put a stop loss at 50k and end up selling it there when it crashes, so overall you made a profit, the loss in there means stop the continuous loss that may happen if it is not stopped, even profit loss included. So all three are not the same thing, there are small differences.

From those terms alone then you could actually tell on what it is, don't make out complicated things just because those terms are just really easy to understand.

Application of those will vary on someones experience and skills.It might be simple as it sounds but making out decision on when it should really be applied on is never been easy.

SL's does have particular or exact time for you to make use off and this is where people do differ.

[virasog]

I'm believing that many traders here don't like using stop loss and the reason is just within our first guess, they don't want the stoploss to take them out.

The reason why out stop loss get triggered in most cases because of two main reasons.

1- We do not take entry at at the support level. If the entry is at or near support, there are chances that the coin will only move up from there.

2- We do not know exactly where to put stop loss. We put stop loss so near to our entry price, that it get filled.

[Dragonfund]

The psychology of stoploss is to prevent trader fund from big loss or not wait long months to recover. It is very important in trading to play safe and smart game. Without stoploss anything can happen to your trade. Crypto market is very volatile it can dump to any level. When you use stoploss you will out from trade and not getting in panic for many months.

I'm one of the trader in that stop-loss boat, I hardly make of it because most of the time, it's either I'm glued to the computer or I'm with my phone checking out market market movements and whenever I see that the movement isn't going as planned, I exit the market which is very bad.

The market volatility has drastically reduce compared to. When btc was below $10k, I once a victim of that when my stop-loss never trigger despite reaching the limit, I had to stop the limits and I was lucky the market was bought very fast to my entry position which I just glady exited my self. This is why it's always better to set it a little bit below where you want it.
Stop-loss is very essential in trading and risk management.

[Victorycoin]

We always trade with profit and stop loss when we open the trade because the market often moves in huge quantities, if you are not in the market and if the market goes against you, your balance will not take time to run out many of us trade part time. Can't stay close to the trade seen at many important times. As such, it is much better to set up TechProfit but I am not in favor of setting staples. I trade small lots, analyze, trade big charts so I don't need stops.