One other thing is that exchanges see where most stop orders are accumulated. Possession of this kind of info is extremely powerful and should not be underestimated. Seriously! You don't need a lot of funds to actually trigger an avalanche of stop orders and then buy cheap at the very bottom. And who knows what exchanges do with this info... maybe they use it internally, or sell it to the highest bidder.
Wouldn't that be fraud in some way and the exchange operators can be sued? That would be a serious breach in security for all the users that entrusted them with money and should be given the right lawsuit. We never know what happens behind the scenes on a trading platform. All we know is that they have all the information we relay to them that can possibly screw is if they used it for other purposes other than identification, proof of transactions and what not.
Personally if I'm not around or I think I wouldn't be able to keep up with the trading action, I don't place any sell orders but usually buy orders. Stop-loss? I use it only if I have to do something real quick and be right back immediately afterwards. It also occurred to me that exchanges also manipulate the prices, up to a certain point where they can touch stop-loss in order to make quick profits. It would be fraud, but what do we know right?