Cleo.finance: Risk management: How to set a Stop Loss

[Issa56]

Once your trading strategy is good, the use of stop loss is the best. This is because I quickly recover my losses after losing through stop loss, but it takes more between 3-4 trades at time to recover some losses of not using it

I think the use of stop lose is optional, the only people I always recommend to use stop lose frequently are the newbies that are just starting to trade, I believe that will help them cut their lose incase trade goes against them. I can't really remember the last time I used stop loss in a trade, I just make sure I don my analysis well then I enter a trade. Mostly whenever I enter a trade and I use stop loss, immediately my stop loss have been hit, then the coin will bounce back that's why I don't really use it again, I always make sure I monitor my trade myself and I always know when to leave a trade. But I know some people that can't trade without stop loss and I don't think it's a bad idea, we all have different pattern of trading and I always advice people to have their own pattern and don't copy what others are doing, learn to do what works for you.

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[justdimin]

I think the use of stop lose is optional, the only people I always recommend to use stop lose frequently are the newbies that are just starting to trade, I believe that will help them cut their lose incase trade goes against them. I can't really remember the last time I used stop loss in a trade, I just make sure I don my analysis well then I enter a trade. Mostly whenever I enter a trade and I use stop loss, immediately my stop loss have been hit, then the coin will bounce back that's why I don't really use it again, I always make sure I monitor my trade myself and I always know when to leave a trade. But I know some people that can't trade without stop loss and I don't think it's a bad idea, we all have different pattern of trading and I always advice people to have their own pattern and don't copy what others are doing, learn to do what works for you.

I agree that stop loss is optional depending on what you are looking for in a trade. I mean normally I wouldn't really trade like that and hope that it would be profitable right away or get out quickly if not. I would either profit, or I would hold it long term, doesn't matter how much it falls because I do not invest into things that I wouldn't hold for at least 10 years, if they are gone then they are gone and I write them off, if they are just low because of bear market then they will recover in the future.

So, stop loss is not something that I care about, but I understand why newbies should use it because it would actually help them protect their investment.

[goaldigger]

Each one of us have different settings towards having risk management since only us can identify on how much money we can afford to lose and what percentage we can accept before we call done on a day on trading. So we need to develop a personal strategy since for sure we can all manage the risk since experience will be one of the factor which we can learn something valuable or helpful on our daily or weekly trades.

The problem is many always forgot to have this because they become more greedy and they follow the hype too much. Having a target price and cut loss price can help you succeed with your trades, this can help you be more responsible with your trades. Yes, we are the only one who can tell when to stop and we should educate ourselves more about trading and continue to stay focus with our strategy. Many didn’t use stop loss level because they are a day trader and they sell right away, stop loss level are advisable for long term trades, better not to just hold.

[palle11]

I can't really remember the last time I used stop loss in a trade, I just make sure I don my analysis well then I enter a trade. Mostly whenever I enter a trade and I use stop loss, immediately my stop loss have been hit, then the coin will bounce back that's why I don't really use it again, I always make sure I monitor my trade myself and I always know when to leave a trade.

Okay I presume that you exit your trade yourself when it is moving opposite your desired direction and you can't afford to lose all to stop loss ? Because I know that all traders lose some and win some. This time when you are not trading with stop loss, take for example your computer become faulty when you are in a volatile trade without stop lose? This you can lose all that would have been protected by stop loss. Anyway like you said every trader should learn a strategy that is working for them but remember stop loss was not designed because of newbies alone, even experienced trade use stop loss.

[rozak]

Each one of us have different settings towards having risk management since only us can identify on how much money we can afford to lose and what percentage we can accept before we call done on a day on trading. So we need to develop a personal strategy since for sure we can all manage the risk since experience will be one of the factor which we can learn something valuable or helpful on our daily or weekly trades.

The problem is many always forgot to have this because they become more greedy and they follow the hype too much. Having a target price and cut loss price can help you succeed with your trades, this can help you be more responsible with your trades. Yes, we are the only one who can tell when to stop and we should educate ourselves more about trading and continue to stay focus with our strategy. Many didn’t use stop loss level because they are a day trader and they sell right away, stop loss level are advisable for long term trades, better not to just hold.

spot traders sometimes forget the cut loss function. I sometimes only trade regular spots without using a cut loss target. it is risky to lose more if the market situation goes against our predictions. I've experienced it myself.
so for those who still remember the use of cut loss, I think you will be fine with your trades. even though we lose, we can plan according to our ability to be able to lose.

[boyptc]

spot traders sometimes forget the cut loss function. I sometimes only trade regular spots without using a cut loss target. it is risky to lose more if the market situation goes against our predictions. I've experienced it myself.
so for those who still remember the use of cut loss, I think you will be fine with your trades. even though we lose, we can plan according to our ability to be able to lose.

Not only spot traders but also the margin traders. I've seen a few of them in a certain trading group that they've forgotten to do it and then they're liquidated.

With just simple mistake of forgetting of setting an SL, their funds have been burned and liquidated.

All of those experiences are burying to each other and that's making them learn that setting it is important.

[Issa56]

Okay I presume that you exit your trade yourself when it is moving opposite your desired direction and you can't afford to lose all to stop loss ?

Yes am always online to monitor my trade and I exit whenever I like, am not like people that will just enter a trade and they will just logout or drop their mobile device, am always online to monitor my trade.

Because I know that all traders lose some and win some. This time when you are not trading with stop loss,

I didn't say I don't lose during trading, I definitely lose sometimes but my profit is always more than my lose which I believe is normal.

take for example your computer become faulty when you are in a volatile trade without stop lose?

Maybe I haven't experienced this kind of problem before, but even if my computer becomes faulty am having my mobile phone which I can login and continue to monitor my trade. But maybe people that are having just one device can put that into consideration.

Anyway like you said every trader should learn a strategy that is working for them but remember stop loss was not designed because of newbies alone, even experienced trade use stop loss.

I know stop lose is not only for newbies, but I always advice all newbies to always use it to always limit their lost incase trade goes against them.

[Franctoshi]

Risk management is a very important aspect of trading by calculating and knowing the amount you want to risk in each particular trade and using stops lose as key tool. But to achieve this proper stop lose needs to be place in key support and resistance areas in the market, hence you will usually get stopped out many times. When I newly started trading I was not using stops, and I had this experience of getting huge draw downs (loses) that stop lose could have saved me of.

[RealMalatesta]

spot traders sometimes forget the cut loss function. I sometimes only trade regular spots without using a cut loss target. it is risky to lose more if the market situation goes against our predictions. I've experienced it myself.
so for those who still remember the use of cut loss, I think you will be fine with your trades. even though we lose, we can plan according to our ability to be able to lose.

Not only spot traders but also the margin traders. I've seen a few of them in a certain trading group that they've forgotten to do it and then they're liquidated.

With just simple mistake of forgetting of setting an SL, their funds have been burned and liquidated.

All of those experiences are burying to each other and that's making them learn that setting it is important.

Unfortunately margin and future traders are taking a huge risk if they don't use a stop loss. Normally in a spot trading you could lose maybe 10-20% in a day at max when you do not look, there are situations where it's going to be more but it's rare, which means that we are not going to see it go down that much.

But with a futures or margin trade, you could lose 100% if you are not careful and there are plenty of people who are not careful at all. That is why it's quite important to use stop loss when you have a chance to lose all of your investment in a single minute if you are not careful. I personally only trade in spot, but still use stop loss carefully if I ever need it.

[boyptc]

Not only spot traders but also the margin traders. I've seen a few of them in a certain trading group that they've forgotten to do it and then they're liquidated.

With just simple mistake of forgetting of setting an SL, their funds have been burned and liquidated.

All of those experiences are burying to each other and that's making them learn that setting it is important.

Unfortunately margin and future traders are taking a huge risk if they don't use a stop loss. Normally in a spot trading you could lose maybe 10-20% in a day at max when you do not look, there are situations where it's going to be more but it's rare, which means that we are not going to see it go down that much.

But with a futures or margin trade, you could lose 100% if you are not careful and there are plenty of people who are not careful at all. That is why it's quite important to use stop loss when you have a chance to lose all of your investment in a single minute if you are not careful. I personally only trade in spot, but still use stop loss carefully if I ever need it.

The scary part of that is that they will really lose everything if they've missed to stop loss. That will be a hard lesson for them that they'll learn eventually when they've forgotten that.

I've seen not just one, not just two but many of the margin traders to have forgotten to set it and they've lost everything.

[Queentoshi]

Stop Loss defines your risk. The use of stop loss will ensure their longevity in the markets.

Thanks for sharing, the importance of understanding the ways to reduce your risk in trading, cannot be over emphasized, traders that refuse to discipline themselves to really understand it before they begin trading will learn from their bitter experience while trading and the experience may be the end of some peoples trading journey. Risk management and setting up a proper stop loss provides a security check in your trading and will ensure the longevity in the market.

[jaberwock]

I think the use of stop lose is optional, the only people I always recommend to use stop lose frequently are the newbies that are just starting to trade, I believe that will help them cut their lose incase trade goes against them. I can't really remember the last time I used stop loss in a trade, I just make sure I don my analysis well then I enter a trade. Mostly whenever I enter a trade and I use stop loss, immediately my stop loss have been hit, then the coin will bounce back that's why I don't really use it again, I always make sure I monitor my trade myself and I always know when to leave a trade. But I know some people that can't trade without stop loss and I don't think it's a bad idea, we all have different pattern of trading and I always advice people to have their own pattern and don't copy what others are doing, learn to do what works for you.

Yeah, it can be optional and you can use it if you are not always there to monitor your trades. Newbies are prone to losses so using stop loss can be good for them but many newbies didn't know this either and other tools in trading but they mostly trade manually. The one that frequently use a stop loss are experienced trader. Doing analysis before a trade is more mandatory than doing a stop loss so don't worry if you didn't use a stop lose the moment you trade.

If your stop loss are easily hit then maybe you set it at a not so low price. You can try adjusting it. Just practice of using it more and I am sure that you will master it in the long run if ever you want to use it again.

[tvplus006]

...I've seen not just one, not just two but many of the margin traders to have forgotten to set it and they've lost everything.

With margin trading, the losses will be even greater if you do not use a stop loss by opening a short position. It should be remembered that when opening a long, the price reduction cannot exceed 100%, while with a short, the price of a coin can increase several times. In this case, your losses may amount to several hundred percent.

[tvplus006]

...This time when you are not trading with stop loss, take for example your computer become faulty when you are in a volatile trade without stop lose? This you can lose all that would have been protected by stop loss...

Every trader currently has many different gadgets, thanks to which, in case of failure of one of them, you can continue to track the price change in the market. The only case when you really need to set a stop loss is when you are resting and cannot control the process of closing an order manually.

[palle11]

...This time when you are not trading with stop loss, take for example your computer become faulty when you are in a volatile trade without stop lose? This you can lose all that would have been protected by stop loss...

The only case when you really need to set a stop loss is when you are resting and cannot control the process of closing an order manually.

Really you mean that ? No I don't agree that the only case to set stop loss is when you are resting, there are many instances that stop loss is good. I have had to lose my capital because of lack of setting stop loss even when watching the market directly. Sometimes the market has high volatility and before you could go to the stop loss area or to exit the trade, it can sign you out in loss. It is always important to use it, this is a good money management system.

[awik p]

...This time when you are not trading with stop loss, take for example your computer become faulty when you are in a volatile trade without stop lose? This you can lose all that would have been protected by stop loss...

The only case when you really need to set a stop loss is when you are resting and cannot control the process of closing an order manually.

Really you mean that ? No I don't agree that the only case to set stop loss is when you are resting, there are many instances that stop loss is good. I have had to lose my capital because of lack of setting stop loss even when watching the market directly. Sometimes the market has high volatility and before you could go to the stop loss area or to exit the trade, it can sign you out in loss. It is always important to use it, this is a good money management system.

for me stoploss is useful to set the maximum loss that I can accept and I use 5% to anticipate my unlucky day. and when making transactions I usually use cutloss if the market moves not according to the framework that I have prepared. but on the other hand stoploss placement must be understood first. that way I can manage risk and still be able to control my emotions in trading

[thecryptogandalf]

...This time when you are not trading with stop loss, take for example your computer become faulty when you are in a volatile trade without stop lose? This you can lose all that would have been protected by stop loss...

Every trader currently has many different gadgets, thanks to which, in case of failure of one of them, you can continue to track the price change in the market. The only case when you really need to set a stop loss is when you are resting and cannot control the process of closing an order manually.

Trading without a Stop Loss is the testimony of a lacking trading system. And I think using Stop Loss prevents you from adding to your losses and being emotionally attached to a trade.

[tvplus006]

Trading without a Stop Loss is the testimony of a lacking trading system. And I think using Stop Loss prevents you from adding to your losses and being emotionally attached to a trade.

Most traders prefer to close their orders manually, and the main reason for this is that very often the price drops quickly and immediately returns to its previous value. In this case, your order will be closed and you will incur a loss. It would be more correct to wait until the price is fixed below the support level and in this case close the order manually.

[Johnyz]

Trading without a Stop Loss is the testimony of a lacking trading system. And I think using Stop Loss prevents you from adding to your losses and being emotionally attached to a trade.

Most traders prefer to close their orders manually, and the main reason for this is that very often the price drops quickly and immediately returns to its previous value. In this case, your order will be closed and you will incur a loss. It would be more correct to wait until the price is fixed below the support level and in this case close the order manually.

Even if you do this manually, I believe it is still advisable to follow your stop loss price to avoid further losses. Many tends to wait for another confirmation before executing their stop loss action and the result becomes worst for them. Usually, traders always do this in futures because you can't afford not to set-up this one or else you'll be liquidated. We should always have the target price and the cut loss price, by this we can be more responsible trader and succeed in the future.

[thecryptogandalf]

Trading without a Stop Loss is the testimony of a lacking trading system. And I think using Stop Loss prevents you from adding to your losses and being emotionally attached to a trade.

Most traders prefer to close their orders manually, and the main reason for this is that very often the price drops quickly and immediately returns to its previous value. In this case, your order will be closed and you will incur a loss. It would be more correct to wait until the price is fixed below the support level and in this case close the order manually.

Even if you do this manually, I believe it is still advisable to follow your stop loss price to avoid further losses. Many tends to wait for another confirmation before executing their stop loss action and the result becomes worst for them. Usually, traders always do this in futures because you can't afford not to set-up this one or else you'll be liquidated. We should always have the target price and the cut loss price, by this we can be more responsible trader and succeed in the future.

Absolutely agree! Setting a stop loss price is crucial for risk management, whether you are trading manually or using automation. It can be tempting to hold on to a position and wait for a potential recovery, but this can often lead to greater losses. By having a clear cut loss price in place, you can minimize the potential for catastrophic losses and make more informed and responsible trading decisions. This is especially important in futures trading, where not having a stop loss in place can result in liquidation. It's always a good idea to have both a target price and a cut loss price, as this allows you to properly balance risk and reward in your trades.