If you think that setting a stop loss will save you from losing, then you are dead wrong. Let me be clear.

Imagine you bought a scam/crap coin, there are many of them, but let's use STRK as an example.

Let's say you bought 1000STRK at a price of $2.5 each. Total $2500. You set your stop loss at $2 and thought the most you would lose was $500. You went to bed and in the morning you discovered that you are $1250 in loss.

How?

Stop loss is not a feature that keeps you from losing. Essentially, this is a trigger for selling. When the price reaches a predetermined point, a sell order (market order) is activated.

So, essentially, when the SL 2.00 level is reached for STRK, the function will inevitably place a sell order, and even if the market price drops further, for example ($1.5), it will still sell at that price.

So a stop loss doesn't help you at all.

Imagine that you gave your friend 100 thousand for his business with a 50% to 50% share of shares. You said that you could suffer a maximum loss of 15 thousand. Let's say that in the first month your friend earns 10 thousand, which means the capital is 110 thousand. But in the second month, your friend lost 50 thousand, so the capital is 60 thousand (although you expected a maximum loss of 15 thousand, now you have lost 20 thousand). Now he will return you 80 thousand and take the full share of the business. In the end he will earn 50 thousand in profit, but now you have no share.

A regular stop loss always helps liquidity providers or brokers. In most cases, this never helps the trader. You may lose less with a stop loss, but you will still lose.

Even in many cases, we see market makers creating a fake price to hit our stop loss in a highly volatile market.

So how do we use stop loss? Professional traders use virtual stop losses or algorithmic stop losses using their own trading software.

A virtual stop loss is a stop loss that is set automatically only when certain conditions are met.

An algorithmic stop loss is similar to a virtual stop loss, but it is a little more advanced. Instead of selling everything at once, he continues to sell gradually at better prices. Stop loss changes constantly.