Who is suited for stop-loss trading and who isn’t will become apparent. This is a major issue.
First of all, this is not just about strengths and weaknesses
but also about the bigger picture beyond individual abilities
For example, for someone who has not been doing stop losses because they want to achieve short-term dreams
it is not suitable
The reason is
because they think in terms of life units
In other words
the sense that losing money on a stop loss means losing a life
This becomes a spiral where you think “the only way to turn life around is FX”
There are other ways to succeed, but
there’s a heavy bias toward that
For those who are initially like that
only those who don’t have such skepticism toward trading
even a little skepticism biases you,
you instantly become unwilling to trade; that’s stop-loss trading
Stop-loss trading sounds good in theory, but
when you consider that you lose 1% each time you stop,
it is a high-risk
because it ends at 100 attempts
Furthermore, if your performance is on a downward trend, the reaction is even stronger
In a downward trend
you might lose 20 times and win 10,
which is a very tough scenario for a downward trend
Therefore, even if you take risks and become more aggressive
in the end you end up with about 0.5% risk per trade—that’s like 200 attempts
This is the risk that arises when you try to trade conservatively with stop-losses
And even that risk is calculated as 200 attempts
Stop-loss trading carries the fate of “being swept away by the rough seas” unless you manage the risk
First of all, this applies not only to stop-losses
There was a case where a real estate company president entered stop-loss and went bankrupt immediately
There was such news
That was a sudden swing from stop-loss
And because stop-loss has a characteristic of “forced loss cut,”
it means you lost money in that instance—very painful
That’s the kind of event that can happen with stop-loss
In other words, if you balance pros and cons too much, it’s not much different from manually cutting losses
And stop orders make it harder
Ultimately, there is no path for stop-loss other than trend-following
Even if trend-following succeeds and you consider “where profits occur,”
you realize there are fewer opportunities
That’s why many people engaged in averaging down, etc.
And at that time it’s usually once or twice a month
Profit depends on how long the trend lasts
But the risk at that moment remains 0.5%
Even if a 20-pip stop, if the trend rises 200 pips,
that’s a 5% profit,
which is equivalent to 10 wins
And up to that point, there will naturally be more stop-loss events
In other words, there are no options other than trend-following
If you ride the trend well, you can gain additional profit, but
if it reverses, losses accumulate accordingly
Even if you add in about five more entries
Losing all five would mean a 2.5% loss
There are irregular factors like this
that are inherent in markets and are already priced in
That’s partly due to the existence of automated trading
In other words, intentional loss markets can appear
So people often use sites like皮算用 to calculate,
but those aren’t real paths; if you think about the real path,
as I explained earlier,
when the trend succeeds, you get 100 pips or more than 200 pips
losses are typically 20 pips or 40 pips, with room
Now, in the morning spreads can be high
In short,
“If you’re lucky, you can make 2.5%–5%”
That is the gist
So the idea that you can grow by 2.5% every week is a dream; in reality
it’s more like 0.25% per week
“Gains of 5–10% in a month come from taking risks in trading,”
that must not be forgotten
Because otherwise you can’t grow in trading unless you reduce risk to the limit
And at the same time, stop-loss has a fatal flaw
It cannot respond to rapid market moves
In other words, if the market moves in the opposite direction
losing about 20 times would result in around 10% loss
This leads to repeated patterns in the same market
Losing 10% then losing five and winning seven, and so on
In other words, you keep losing
Even if automated trading builds a cautious trend-following logic
you’re being targeted accordingly
In other words, stop-loss can become the problem
Stop-loss requires a very long-term view
That’s why the control tools are averaging down and manual cutting
Only those who take them seriously can actually grow
Because they can meaningfully control and keep increasing
Stop-loss suited people tend to be
primarily beginners and younger people
Because as age passes, you become more prone to
That is, you feel the pressure and it affects your mental state
In other words, life units flow into the market; thoughts and everything
Therefore, stop-loss suited people are in a rare state
People end up being satisfied with automated trading
And the results of automated trading speak for themselves
Ultimately, over five years you often see about 2–5x gains
And even fewer in many cases
When you consider all that
the focus becomes how to reduce risk
and how to improve hedging
This is the fundamental question of what suits you about stop-loss
If you’re into stop-loss, it’s mainly a concern for beginners and younger people
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