WHY YOU MUST ALWAYS USE A STOP LOSS!🙆‍♀️(RANT)

20 nov 2022

🌺What is a Stop Loss?
A stop-loss order is an order that automatically closes a losing position once the price hits the pre-specified level.
We usually calculate SL in pips, but there can be many ways to set it.

It can be time based, percentage based or volatility based. For some investors SL is some piece of critical news, which alters their perception of the value of the asset.

Regular stop losses can be many and varied too, for example trailing stop. Also, we sometimes move SL to entry after the half close to protect the gains and make our position risk free.

However, all situations I listed above have one thing in common and it is the fact that STOP LOSS IS USED.

I am both surprised and terrified by the sheer number of people who send me screenshots of their MT4 with SEVERAL open trades on the same pair ALL without SL and with 90% of account basically GONE. And they ask me what should they do and if I could fix the situation…

🤯A great illustration of what is would take to recover from such a loss, is on the drawing above. With the 90% loss, you have only one tenth of the original account left. That means you need to make TEN times more money than you have left JUST TO RECOVER your losses.
Let that sink in, bros. 999% gain needs to be made just to have your old account back.

It took you a day to blow it, and might take months to recover the losses. This is the brutality of the trading. The market is unforgiving and WILL PUNISH you if you treat is without respect. If you are careless or if you make mistakes. The market always comes back to collect, waiting for the moment you drop your guard and relax for a second.

ALWAYS use Stop Loss, because, you won’t believe it but IT STOPS THE LOSSES❗️

Anyhow, Here are my 5 cents on the issue, see ya later,
Anabel💋

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