Why you should always use a Stop Loss

The number one rule of trading is not "make money". It is "survive". If you lose your capital, you can't play the game anymore. This is where the Stop Loss comes in.

A Stop Loss order is an instruction to automatically sell an asset when it reaches a certain price. It acts as an emergency brake, limiting your potential loss on any single trade.

The Mathematics of Recovery

Many new traders think, "If it goes down 50%, I just need it to go up 50% to break even." This is mathematically false. The deeper the hole, the harder it is to climb out:

• If you lose 10%, you need an 11% gain to break even.
• If you lose 50%, you need a 100% gain to break even.
• If you lose 90%, you need a 900% gain to break even.

A strict Stop Loss at 5-10% prevents you from ever falling into the 50% hole.

Removing Emotion from the Equation

When a trade goes red, human psychology works against us. We hope. We pray. We say, "It will bounce back." Automation solves this. A bot doesn't hope. It executes.

By pre-defining your exit point with Quantbreed, you commit to the plan before emotions take over. When the condition is met (e.g., "Price drops 5%"), the bot sells instantly.

How to Set a Trailing Stop

A "Trailing Stop" is an advanced version that moves up as the price rises. If you buy Bitcoin at $50k and set a trailing stop of 5%, if Bitcoin goes to $60k, your stop moves up to $57k. This locks in profit while still protecting you.

Using Quantbreed, you can add a Trailing Stop block to any strategy with a single click. It's the most powerful tool for letting winners run while cutting losers short.