Stop loss was not devised to safeguard your funds; it was formulated to facilitate their depletion. Placing a stop loss won't shield you from losses as commonly believed. Consider this scenario: you invest in a dubious coin like $STRK at $2.50 each, totaling $2500, with a stop loss set at $2. You assume your maximum loss would be $500, but wake up to a $1250 loss. Why? Stop loss merely triggers a market order when a predetermined price is reached, not preventing further decline. It's akin to lending $100k to a friend for a 50-50 share in their business, capping your potential loss at $15k. After a profitable month, the capital increases to $110k, but a subsequent $50k loss drops it to $60k, surpassing your expected loss. The friend repays $80k, seizing full ownership despite eventually profiting $50k, leaving you with no stake. Traditional stop loss primarily benefits brokers, often failing traders. Professionals employ virtual or algorithmic stop loss strategies tailored to specific conditions, gradually selling at optimal prices rather than all at once. Stay tuned for insights into these techniques.
