Stop-loss is a protective tool, but for most it becomes a trap. Mistakes in its use lead to traders losing more than they could. Let's analyze the 5 most common miscalculations.
1️⃣ Setting a stop-loss too close to the price
Beginners love to 'hedge' at every step. As a result, the slightest market noise knocks them out of position. The market breathes volatility — the stop should account for the average price range (ATR, volatility of the pair), rather than being set 'by eye'.
2️⃣ Ignore liquidity
Stops in low liquidity zones become easy prey for market makers. If you place a stop right at an obvious level, be prepared for 'stop hunting.' Analyzing the order book and liquidity levels helps avoid this.
3️⃣ Do not move the stop-loss to breakeven
When a trade goes into profit, the stop should be pulled at least to the entry point. Many hope, 'let it grow more,' but the market turns, and profit turns into loss. Breakeven is discipline, not greed.
4️⃣ Use the same stop size for all trades
Each instrument has its own volatility. A stop of 1% on BTC and on an altcoin with a daily range of 15% — these are different risks. There are no universal stops.
5️⃣ Ignore risk management
Even an ideal stop won't save you if you're risking 20% of your deposit on one trade. A stop-loss is part of the system, not its replacement. The optimum is a risk of 1–2% per trade.
📌 These mistakes are familiar to almost every trader. Share your experience — it is on the mistakes of others and yourself that true discipline is built.
#stoploss #RiskManagement #TradingMistakes #cryptotrading #Write2Earn
