Should you place a stop loss in trading?

Something happened yesterday that made me want to say a few words about the issue of stop loss. Of course, this is just my personal opinion. I have seen many times where the market has hit your stop loss and then moved up or down sharply in the direction you made. Do you have a feeling that if I don’t set a stop loss, I won’t lose money and may even make a profit? I have also seen many market situations where you hold on to the order and liquidate your position immediately. As a result, the market reverses and you make a lot of money. Are you very lucky? What I want to say is, you must bring a stop loss! Because what we are doing is a speculative thing, not a gambling thing! All the money you earn through luck will one day be lost through luck! Of course, it is also a science to bring stop loss and where to place stop loss to reduce friction and consumption.

Your reflections on stop loss are astute and reflect the ongoing debate within trading circles. Stop loss orders are indeed a double-edged sword. While they can help limit losses and manage risk, they can also sometimes lead to premature exits from trades, especially in volatile markets where price fluctuations can trigger stop loss orders before the market moves in the anticipated direction.

It's true that there are instances where the market hits your stop loss and then reverses sharply, potentially causing frustration. This phenomenon is often referred to as 'stop hunting' by some traders. However, it's essential to understand that trading involves uncertainties and risks. While some traders might have experienced success by not setting stop losses and riding out market fluctuations, it's equally likely that others have suffered significant losses by doing the same.

The decision to use stop loss orders ultimately depends on your trading strategy, risk tolerance, and market conditions. Stop loss orders can help protect your capital and prevent catastrophic losses, especially in fast-moving markets or during unexpected events.

Your emphasis on the speculative nature of trading and the importance of risk management is crucial. Trading is indeed a speculative endeavor, but it should not be equated with gambling. Successful traders often emphasize the importance of discipline, patience, and risk management techniques like stop loss orders to navigate the uncertainties of the market.

In summary, while stop loss orders may sometimes result in missed opportunities or premature exits, they play a vital role in risk management and capital preservation in trading. It's essential to strike a balance between risk and reward and to develop a trading plan that incorporates sound risk management principles.

Hello, I very much agree with your understanding. Jim Paul and Brendan Moynihan's book 'Stop Loss' summarizes the words of some financial giants. They found that what the big guys said about profits were different, and often even contradicted each other on one point, but the big guys all made money, so who was right and who was wrong? But if you think about it another way and look at what they said about losses, they are surprisingly consistent! Therefore, stop loss is the primary condition for risk management. The meaning of stop loss is the ratio of risk to return. Similarly, stop loss is not static, and changing the stop loss position also depends on market conditions and logic. There is nothing wrong with your understanding, just implement it.

A stop loss is essential! As you have said, Forex trading is not gambling and as such a trading strategy should be utilised that incorporates stop losses. If trades are hitting their stop and then prices reversing into a position in which there would have been profit, further consideration to areas of liquidity should be given.

Institutional traders will seek to close out speculative traders stop loss orders by targeting liquidity i.e. the point at where stop loss orders sit. If a stop loss order is placed below this liquidity zone, it should be hit only in the event of a market shift.

GeekyForex posted:
A stop loss is essential! As you have said, Forex trading is not gambling and as such a trading strategy should be utilised that incorporates stop losses. If trades are hitting their stop and then prices reversing into a position in which there would have been profit, further consideration to areas of liquidity should be given.

Institutional traders will seek to close out speculative traders stop loss orders by targeting liquidity i.e. the point at where stop loss orders sit. If a stop loss order is placed below this liquidity zone, it should be hit only in the event of a market shift.

I still don’t quite understand your point of view. Can you make it more straightforward?

Oh, I see that the stop loss theme is like a conspiracy theory theme. So many opinions and debates. I believe so, if you have doubts about trading, put sl.
If you believe that you will earn 99%, don’t put sl. lol.

i beileve it depends on your strategy , like my most winning strategy doesnt have any sl, you can try it
https://www.tradingview.com/script/kkb6zQp9-TitanBot-AutoLotIncrease/
use it on gold (TVC) chart , 30 mins timeframe for best results

Stop loss is indeed neccessary in trading, to limit your risk when your plan goes wrong. To not put SL just because you happen to experience market hit your SL then move up and down from the direction that you planned on is just an excuse and a scapegoat. I simply see that you need to work on your entry.

cetarslim posted:
Stop loss is indeed neccessary in trading, to limit your risk when your plan goes wrong. To not put SL just because you happen to experience market hit your SL then move up and down from the direction that you planned on is just an excuse and a scapegoat. I simply see that you need to work on your entry.

I think every order needs a stop loss, even in a volatile market. What is a volatile market? You will know it after you have experienced it. If you don't know it at the beginning, it is impossible to seek certainty in the unknown. Stop loss can give us an extra layer of protection.

WhiteWitcher posted:
Oh, I see that the stop loss theme is like a conspiracy theory theme. So many opinions and debates. I believe so, if you have doubts about trading, put sl.
If you believe that you will earn 99%, don’t put sl. lol.

Don’t believe in the claim that you can earn 99% of the profits in the unknown. It’s all about judging the unknown. You need to stop loss to ensure safety and expand profits.

If you put too tight SL and your broker is dishonest it will hunt you.
If you put wide SL the market will hunt you, but the broker can't unless it's an extremely scam broker.

So, how would you like to be hunted it's on you. LOL

Better to use hidden SL.

Good luck

alxeanderer posted:

WhiteWitcher posted:
Oh, I see that the stop loss theme is like a conspiracy theory theme. So many opinions and debates. I believe so, if you have doubts about trading, put sl.
If you believe that you will earn 99%, don’t put sl. lol.

Don’t believe in the claim that you can earn 99% of the profits in the unknown. It’s all about judging the unknown. You need to stop loss to ensure safety and expand profits.

check the strategy i posted above and you will know that using a sl is not necessary and mainly depend on your strategy and your way of trading

pantherFx365 posted:
If you put too tight SL and your broker is dishonest it will hunt you.
If you put wide SL the market will hunt you, but the broker can't unless it's an extremely scam broker.

So, how would you like to be hunted it's on you. LOL

Better to use hidden SL.

Good luck

Thank you very much, please keep communicating

hamzaaraydah posted:

alxeanderer posted:

WhiteWitcher posted:
Oh, I see that the stop loss theme is like a conspiracy theory theme. So many opinions and debates. I believe so, if you have doubts about trading, put sl.
If you believe that you will earn 99%, don’t put sl. lol.

Don’t believe in the claim that you can earn 99% of the profits in the unknown. It’s all about judging the unknown. You need to stop loss to ensure safety and expand profits.

check the strategy i posted above and you will know that using a sl is not necessary and mainly depend on your strategy and your way of trading

Thank you very much, please keep communicating

hamzaaraydah posted:
i beileve it depends on your strategy , like my most winning strategy doesnt have any sl, you can try it
https://www.tradingview.com/script/kkb6zQp9-TitanBot-AutoLotIncrease/
use it on gold (TVC) chart , 30 mins timeframe for best results

Thank you very much, please keep communicating

WhiteWitcher posted:
Oh, I see that the stop loss theme is like a conspiracy theory theme. So many opinions and debates. I believe so, if you have doubts about trading, put sl.
If you believe that you will earn 99%, don’t put sl. lol.

Thank you very much, please keep communicating

cetarslim posted:
Stop loss is indeed neccessary in trading, to limit your risk when your plan goes wrong. To not put SL just because you happen to experience market hit your SL then move up and down from the direction that you planned on is just an excuse and a scapegoat. I simply see that you need to work on your entry.

Thank you very much, please keep communicating

WhiteWitcher posted:
Oh, I see that the stop loss theme is like a conspiracy theory theme. So many opinions and debates. I believe so, if you have doubts about trading, put sl.
If you believe that you will earn 99%, don’t put sl. lol.

Thank you very much, please keep communicating

GeekyForex posted:
A stop loss is essential! As you have said, Forex trading is not gambling and as such a trading strategy should be utilised that incorporates stop losses. If trades are hitting their stop and then prices reversing into a position in which there would have been profit, further consideration to areas of liquidity should be given.

Institutional traders will seek to close out speculative traders stop loss orders by targeting liquidity i.e. the point at where stop loss orders sit. If a stop loss order is placed below this liquidity zone, it should be hit only in the event of a market shift.

Thank you very much, please keep communicating