Why Your Stop Loss is Just a Suggestion (And Why You’re Broke)

I’ll never forget the day I watched a mate blow through £47,000 in three hours. Not over three months. Three. Hours. You want to know what his parting words were? “I just knew it was going to bounce back. I wasn’t going to take the loss.”

Spoiler alert: it didn’t bounce back. And he did take the loss. He took it all the way down to zero.

That’s when I realized something that would’ve saved me about £200,000 in tuition fees earlier in my career: most traders treat stop losses like the terms and conditions on an app—something you vaguely acknowledge exists, then immediately ignore.

The Tragedy of the Optional Stop Loss

Here’s the thing nobody tells you when you’re watching YouTube videos of some crypto bro in a Lambo screaming about “diamond hands”—a stop loss isn’t a suggestion. It’s a safety rail on a cliff you’re driving down at 120 mph in the dark.

Yet what do I see day after day in the retail trading community? Traders moving their stops. Widening them. Deleting them entirely. Moving them further away from the entry like they’re playing some inverted game of financial Jenga.

I had a conversation with a retail trader last week—let’s call him Derek, because he looked like a Derek—who told me, “I don’t use stop losses because they just get me shaken out at the worst time.”

Right. That’s the problem, Derek. Not that you’re trading without a life jacket. The problem is the life jacket is too restrictive.

Derek’s now trading a £2,000 account after starting with £50,000. He’s genuinely convinced he’ll eventually make it back. He’s not wrong—just like the lottery ticket might eventually pay off.

The Psychology of Self-Sabotage

Let me be direct: the reason you won’t set a proper stop loss is psychological, not logical. It’s not because your stop loss level is “wrong.” It’s because accepting a loss—any loss—feels like defeat.

So you move the stop. You widen it just a bit. “Just another 20 pips,” you tell yourself, while your heart rate resembles a jungle drum solo and your phone notifications are screaming at you like a banshee.

Then—and this is where it gets fun—the market does exactly what you didn’t want it to do. It reverses violently, ripping through your expanded stop loss like it’s not even there. Except now, instead of taking a 50-pip loss, you’re down 200 pips. And you’re still not taking it because, well, you’re committed now.

This is called “revenge trading.” It’s the financial equivalent of going to the casino after a bad day to “win your money back.” Spoiler alert: spoiler alert: casinos don’t give you your money back. Neither does the forex market.

I’ve seen traders turn £10,000 accounts into £0 accounts in this exact manner. And you know what they all have in common? None of them used their stops.

The Math (Which You’re Ignoring)

Let’s do some brutal arithmetic, shall we?

If you risk £100 per trade with a 50-pip stop loss on EURUSD at standard lot size (100,000 units), you’re risking a defined amount. This is called position sizing—it’s the only part of trading you can actually control, and it’s the part most of you ignore completely.

If you enter at 1.0850 with a 50-pip stop at 1.0845, and you move that stop to 1.0840, then to 1.0835, then to 1.0830… congratulations. You’re not managing risk anymore. You’re gambling.

Here’s the terrifying bit: mathematically, you need roughly a 55% win rate just to break even with a 1:1 risk-to-reward ratio and normal commissions. You need to be better than a coin flip just to not go bankrupt slowly.

But if you’re moving your stops, widening them, and occasionally deleting them altogether? Your effective win rate is probably closer to 35%. And that’s being generous.

Which means you’re not trading. You’re donating to your broker’s profit margin with extra steps.

The Calculator That Actually Helps

Here’s why tools like proper forex calculators matter: they remove emotion from the equation. They don’t care if you “feel” like the stop should be wider. They calculate the exact position size you should take based on your risk tolerance, account size, and stop loss distance.

If you used one—actually used one—you’d immediately realize that 90% of your “winning” trades are actually just variance. You’d see that the only thing keeping you alive is proper position sizing and actually taking your stops.

The traders I know who consistently make money? They move their stops closer to entry once a trade moves in their favor. They’re locking in profit, managing risk, and treating their stops like they’re literally life-or-death important.

Because here’s the truth: they are.

The Uncomfortable Conclusion

Your stop loss isn’t “just a suggestion.” It’s the only thing standing between you and the kind of loss that keeps you awake at 3 AM wondering where it all went wrong.

Derek, from earlier? He took a stop loss yesterday. Lost 45 pips. You know what he did? He took it. Accepted it. Moved on to the next trade. It hurt, but his account survived.

The traders who don’t survive? They’re the ones who convince themselves that stops are optional, that “this time is different,” that they know the market better than 15 years of statistical evidence.

They’re the ones funding the accounts of traders who actually use stops.

Use your stop loss. Respect it. Trust it. Or keep donating to your broker.

Your future self—the one who’s not financially devastated—will thank you.

---

Now go set a proper stop loss. No, really. Close this tab and do it.