Thoughts on Stop-Loss$

A stop-loss is merely a tool that works effectively only in conjunction with the right risk management strategy.

Pros of Stop-Loss:

Limiting losses – automatically closes a position when a certain loss level is reached.

Trader discipline – helps avoid emotional decisions in stressful situations.

Capital protection – reduces the risk of losing a significant portion of the deposit.

Automation – no need to constantly monitor the market.

Risk planning – allows for pre-calculation of the risk/reward ratio.

Cons of Stop-Loss:

Possible "stop hunting" – short-term price fluctuations can close a position that would have subsequently gone into profit.

Does not guarantee execution at a precise price – slippage can occur during strong fluctuations or news events.

Too tight stops – can lead to frequent losing trades even with the correct market trend direction.

Illusion of safety – traders may open overly risky trades relying on stop-loss.