Stop Losses and Risk/Reward

A stop loss is a pre-decided price at which you exit a losing trade automatically. It is the seatbelt of trading. Without one, a small loss becomes a catastrophic loss the moment the market moves against you and you start "hoping."

A trade without a stop loss is not a trade — it is a prayer. Most beginners do not lose because they pick bad trades. They lose because they refuse to accept a small loss and let it turn into an account-ending loss.