Who is suited for stop-loss trading and who is not, this is a major issue

First of all, this is

not just a matter of strengths and weaknesses

for example, for someone who has never done short-term trades because they want to realize a short-term dream

it is not suitable

the reason is

because they think in terms of life units

in other words

losing money on a stop loss feels like losing your life

this has fallen into a spiral where the only way to reverse your life is “FX,”

there are other ways to succeed too, but

there is a strong bias toward that idea

for those who are predisposed from the start

only those who don’t have such suspicion about the market

even a little bias of suspicion makes you

suddenly find it unsuitable; that is stop-loss trades

stop-loss trades sound good in theory

but in reality, when you think you lose 1% each time you stop out

it is a high risk

because it ends after 100 trades

and if performance is on a downward trend, even more so

when it’s downsloping

you trade while it’s down 20 losses and 10 wins

which makes it extremely tough

therefore, even if you become aggressive considering the risk

it ends up at a risk of around 0.5%—in other words, about 200 trades

this is the risk you face when trying to be prudent with stop-loss trades

even that risk is accounted for as two hundred trades

that’s how much stop-loss trades are at risk of being swept away by rough seas if you don’t manage the risk

first, this is also true beyond stop-loss

there was a case where the president of a real estate company collapsed into bankruptcy due to stop-loss

there was such news

that was due to rapid fluctuations from stop-loss

and because stop-loss inherently causes forced liquidation

that’s why they lost money; it’s quite painful

that kind of thing being possible is the nature of stop-loss

in other words, when you offset the pros and cons too much, it’s not much different from manual stoploss

the presence of stop makes the difficulty higher

and in the end, stop-loss has no path other than price-following trends

even if trend-following works and there’s profit to be had

you’ll realize there are fewer opportunities

that’s obvious when you look at past markets

that’s why many people used averaging down, etc.,

and it usually happened about once or twice a month

profits depend on how long the trend lasts

but the risk at that time remains about 0.5%

even if the trend moves 200 pips with a 20-pip stop,

that’s about 5% profit

which means about 10 trades’ worth of winnings

and up to that point, you’ll have more stop events

in that case, if you ride the trend well, you can gain additional profit

but if it breaks, losses accumulate accordingly

even if you enter an additional five times

if you lose all five as well, that’s a 2.5% loss

also irregular elements like that

are part of the market and are already priced in

which is partly due to the existence of automated trading

in other words, deliberate loss markets can appear

so you often

use sites that perform rough calculations like Mr. Pythagoras, but

that isn’t a real path; if you consider the actual path,

as explained earlier

when the trend succeeds, it’s 100 pips or more, or 200 pips or more

losses are typically 20 pips or 40 pips with ample margins

these days, spreads are higher in the morning

In one line

if you’re lucky, you can earn 2.5% to 5%

that’s the reality

so the idea of growing 2.5% every week is a dream; in reality, it’s more like

about 0.25% per week

and you shouldn’t forget that “monthly gains of 5–10% come from taking on risk”

First of all, you can’t grow in trades unless you reduce risk to an extreme

and at the same time, stop-loss has a fatal flaw

it cannot respond to sudden market fluctuations

in other words, if the market moves in the opposite direction

losing about 20 times would equate to about 10% loss

and repeated patterns would occur in the same market

losing 10% then losing five times and winning seven times, and so on

in other words, you keep losing

even if automated trading builds a cautious trend-following logic

you will be targeted to a certain extent

in other words, stop-loss could become the problem

stop-loss requires a long-term view

and the control mechanism for that is “averaging down” and “manual stoploss”

only those who think about them seriously can actually grow consistently

because they can manage the control mechanism well, they can keep increasing

Stop-loss-oriented people are

still beginners and typically younger

because as you age, you’ll get anxious and it’ll affect your mental state

in other words, life units flow into the market, including thoughts

so there are relatively few people who are suited for stop-loss

everyone else is satisfied with manual or automated trading

and the results of automated trading tell a story

over five years, it’s often 2–5 times, and

the smaller the better, which is normal

given all this,

the discussion becomes how to reduce risk and improve hedging

that is the fundamental question about stop-loss for me

this is what this is for me

the fundamental question of whether stop-loss suits you

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