The Most Common Mistake
By Warsnop ICF on ALTCOIN MAGAZINE
Trading without a stop loss is one of the, if not the most common mistake a trader makes. Trading without a stop loss is suicide. People don't really trade, they gamble, and gamble involves greed and some insane permutations which somehow ends up being in your favour when you are calculating them in your own mind. You don't want to lose a penny for which you are willing to risk even more in a slender hope that it will come back to your breakeven, or even in some case profits. If you don't understand the fact that trading will always involve some wins as well as some losses, then, trading is not for you and you should quit right away, bitter truth but it is what it is. Here are some of my advised percentages on where to use a stop loss:
- While day trading or scalping on micro or mini timeframes, I always keep a stop loss of nearly 3–4% 0f where I bought it.
- While swing trading, I prefer to keep my stop losses at 8–12%
- A very smart way to use a stop loss: Draw supports, and decide accordingly where to use and keep 1% below the next support or whichever support you want to use as a stop loss.
One of the most interesting things while using a stop loss is, It should always depend on YOUR RISK TOLERANCE and STRATEGY. At the end of the day, it is your money and no-one knows better than you of how much you can afford to risk and where. Also, strategy plays a huge role because you have set your aims and targets which you want to achieve by trading, so you know how to fix your risk: reward ratio and that plays a huge role too.
A Perfect trader is a mixture of everything, who know how to handle his emotions while trading and how to manage his risks, and without stop losses, you can't even think of becoming a trader.
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