“Do you set stop-loss?” This is the question I have been asked the most.
After years of trading contracts, I have long seen through a cruel truth:
In the short term, it relies on strategy; in the medium term, it relies on discipline; in the long term, it’s about transaction fees + slippage!
Do you think you get liquidated because your skills are lacking? Many times, you die because of transaction fees, slippage, and frequent stop-losses.
Most people are still indulging in the fantasy of "finding a universal trading system," but I tell you: it simply doesn’t exist!
The market changes every day, and behind the ups and downs are human nature, emotions, and the betting between bulls and bears, rather than some so-called “magical strategy.”
I used to be confused, until I took decades of historical data to test various strategies in stocks, futures, cryptocurrencies, and forex; only then did I fully understand:
What the law of large numbers, normal distribution, extreme value theorem, statistics, and volatility models really mean...
These concepts are useless if you just know them; you need practical experience, to go through losses, to survive liquidation, to truly understand.
Do you know? Stop-loss, to some extent, is just “artificial liquidation!”
Every time you set a stop-loss, you incur more transaction fees and more slippage. If you set stop-losses too often, cut losses too frequently, your account will be unknowingly “boiled like a frog in warm water” and evaporate!
Stop-loss is a tool, but it is definitely not a myth. Do you think you are “controlling risk”? In fact, you are just giving money to the exchange and providing data for your counterpart.
The truly profitable long-term strategies rely on the model's positive expected value, probability advantage, and logic, rather than relying on mechanical stop-loss to “survive”!
Of course, I’m not saying stop-loss is useless. If you are the kind of person who gambles every day, plays with scams, uses three to five times leverage, and can’t even discern market reversals, without stop-loss you’ll be liquidated in an instant!
But if you operate with a system, rhythm, and strategy, you can control risk in other ways, such as using smaller positions, hedging, or building positions in batches, rather than cutting positions immediately at the slightest pullback.
So, stop asking me whether to set stop-loss! The key to making money has never been whether you set a stop-loss, but whether you have a complete set of mature trading thinking and systems!
In this crypto game, it’s not that we fear your losses, but that you don’t understand why you are losing at all?
Only when you understand, do you have the chance to live long and earn steadily!
