Key Benefits of Stop Loss (SL):
“If you can’t take a small loss, sooner or later you will take the mother of all losses.” – Ed Seykota
“Losing a position is aggravating, whereas losing your nerve is devastating.”
– Ed Seykota
1. Limits possible big losses.
2. Saves capital from dangerous draw down.
3. Frees up cash for next possible trade/opportunity.
4. Removes emotion from trading.
5. Reduces mental stress in trading.
6. Frees up mental spaces for next trade.
7. Guards against sudden market volatility.
8. Helps to maintain trading discipline.
9. Helps to achieve long term trading goals.
10. Reduces further averaging risk.