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Many traders keep spinning in the loop: as soon as the price slightly fluctuates, they get stopped out, and just when they finally see a trend, they can’t get on board. Why is this happening?
Almost every novice has heard the iron rule — small stop-losses, big take-profits. Theoretically invincible: small losses, big gains, it sounds like the secret to stable profits. But once you actually start trading, you’ll find that account funds don’t collapse overnight; they’re gradually worn away.
**Where is the fundamental problem?**
Your stop-loss is set too tight. How tight? Even a sneeze in the market can trigger your stop-loss. This was originally meant to prevent risk, but it ends up being a suicidal stop-loss. Normal market fluctuations? Nonexistent. Price swings are common; you’re fighting these with a rigid stop-loss line, and being swept out is just a matter of time.
What’s more painful is that the stop-loss level you set is actually the same as most others do. Market makers know exactly where these "hot stop-loss zones" are. Slightly pushing the price down causes a flood of stop-loss orders to trigger, then the price quickly pulls back. And you? You’ve already been thrown far away.
**So, what should you do?**
The core is one word — space. You need to leave enough room for market fluctuations.
Don’t bother trying to avoid every tiny movement; that’s inviting trouble. Instead of setting an absurdly tight stop-loss, develop a more reasonable protection range based on actual volatility. This way, you can block genuine risks without being wiped out by normal market noise.
The true art of trading lies in finding that balance line which isn’t triggered too frequently but can effectively protect your principal.