# Trading Iron Rules: Stop Loss is Your Only Lifeline
"Without stop loss, one loss can wipe away your profits from the past hundred wins."
Stop loss is not failure: Stop loss is the cost of trading, just like paying rent when running a shop. Refusing to stop loss is refusing to admit mistakes, and ultimately you'll be forcibly executed by the market (liquidation).
Don't hold positions: In stocks, you can hold for years waiting to break even. In crypto, a 90% daily drop is the norm, and it may never recover. Holding positions is the fastest path to liquidation.
Risk-reward ratio > Win rate: You don't need to be right every time. If you lose $100 each time and profit $300, even if you lose 4 times and win once, you're still making money. Pursue a high risk-reward ratio, not a high win rate.
# Trading Iron Rules: Stop Loss is Your Only Lifeline
"Without stop loss, one loss can wipe away your profits from the past hundred wins."
Stop loss is not failure: Stop loss is the cost of trading, just like paying rent when running a shop. Refusing to stop loss is refusing to admit mistakes, and ultimately you'll be forcibly executed by the market (liquidation).
Don't hold positions: In stocks, you can hold for years waiting to break even. In crypto, a 90% daily drop is the norm, and it may never recover. Holding positions is the fastest path to liquidation.
Risk-reward ratio > Win rate: You don't need to be right every time. If you lose $100 each time and profit $300, even if you lose 4 times and win once, you're still making money. Pursue a high risk-reward ratio, not a high win rate.