III.9. Using Stop Loss orders.

The main cornerstone of trading, around which disputes will never subside. Let’s just say that stop losses give your trading system proper consistency – you immediately limit your loss, if you allow it at all. In the situation described above, having 100,000 rubles and 3 days of losses of 1 % You will be left with your 97,000 rubles, because you used stop losses. And let’s say that you got to the beginning of the short scenario, did not put stops, hoping for a chance and got 3% loss on the first day, 5% loss on the second day and 7% on the third day. According to Table 3, we see that you will no longer have 97,000 rubles (3% of the account), but 85699.5 rubles. I.e. You lose 14.5% of your account! This situation is the most ordinary.

Table 3.

Current account size per dayThe amount of loss per dayLoss

Undoubtedly, it is your personal business whether to put a stop loss or not. But the example shown above clearly reflects the advantages of having a loss-cutting system over the absence of such a system. Here is one tragic example of excessive self-confidence that overtook millions of traders around the world when playing with the LUNA altcoin (see Figure 105). Although the shorts were excellent!

Fig.105. Altcoin LUNAUSD. Having started falling on 06.05.22 from $ 83, the LUNA altcoin fell to $ 0.00023 already on 15.05.22, trading on it was stopped, and the altcoin itself was delisted – excluded from the exchange. Comments, as they say, are unnecessary. Those who bribed at the very bottom ended up with millions of coins at a price of $ 0.00023, which will never be sold to anyone! One trader from Mexico lost 2.5 million. $ for 3-4 days on this fall!

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