Stoploss – A very common mistake that many beginners are sure to encounter is not entering a stoploss and then liquidating the account. How does it all come about and what to watch out for? We will look at this in today’s article.
The system must be observed! Keep Stoploss
As the trader’s biggest killer, he becomes a hodler. And what do I mean by that? Let’s show a simple example in a store where we enter the market. Specifically, the purchase of BTC at $ 10,000. At first we have some target and also stoploss. However, BTC is in a bearish trend and gradually falls to $ 9,000, later to $ 6,000. We originally had a stoploss and therefore $ 9,000 account protection, but instead of a stoploss, we made a purchase or canceled it. This is a very common psychological reaction of beginners who do not want to accept the loss, so at all costs they try to avoid realized trades at a loss.
The 2 most common mistakes I take are either freezing the stop loss and continuing the trade up to, for example, a 50% loss, or even making a purchase after each drop. Gradually, however, the capital will be repurchased and we are still approaching liquidation. Eventually, the price will drop to $ 6,000, where let’s say that the liquidation price of the entire account is, and that also means our end. We lost to the entire account and have nothing. On the contrary, even if we gave the stoploss, we could have a protected account and be far from liquidation.
This is, of course, an example of leverage trading. In the case of spot trading, of course, there is no liquidation, but surely the trader never wants to become a hodler. Therefore, even in this case, stoploss is the basis. This is whether as a clearly defined value or closing in a loss through the market based on the x signal.
A lesson?
Certainly, if you are trading, do not try to buy at the risk limit after each decline. After more and more declines, you very often lose your entire account. It is similar in the case of spot trading. The key is to stick to the trading system and adhere to it. If we have a stoploss for $ 9,000, we’ll just leave it there. Even if the trade closed at a loss.
