Post
Topic
Board Trading Discussion
Re: Risk management: How to set a Stop Loss
by
EarnOnVictor
on 01/11/2022, 07:23:00 UTC
What I know is that people that uses stop lose are those with high risk trading, those that trade with higher amount of money and professional enough prefer not to use stop lose because they prefer to begin with a very low leverage. These are the kind of traders that trade with even less than 1x leverage, or not more than 1x. For a trader that trade with high amount of money, starting to trade with 0.25x and not going more than 1x, but increased the money to 1x when he noticed the market would favour him. This would bring the entry price closer to the mark price four times more and a slight correction towards its position might lead to profit or reduced loss. I do not know why people do not talk about this before they should think of using stop loss. Maybe because most traders uses low amount of money to trade and starting trading with over 1x or higher leverage. But the truth is, those that profit more about trading have no option than to increase their trading fund, open position with very low amount first and average from less than 1x to 1x or not more than 2x before thinking about stop loss. Traders have different strategies though.
Any trader is welcome to follow a trading approach that is best for them, but this will not stop the right ethics of trading for productivity and account safety. Regardless of using a low risk in trading, you might still lose the amount that is too much for you to bear in some market conditions even if you do not lose all your money. So, you now think it will be easy to recover such an amount again if you would want to maintain the low risk?

This is where the beauty of using the stop loss comes in, it does not let you lose more than what you could bear or easily recover (good trading management).