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Recently, I’ve been pondering a question—what exactly is the art of setting stop-losses?
Last night, I opened two short positions at the same time. One was on ONDO, where I saw a 17% large unlock and decided to enter decisively; the other was on CC, because it broke through a key support level, so I followed with a short. Both prices fell, but the processes were completely different.
For ONDO, I set a 0.4 stop-loss, almost hit it, but finally dropped overnight without incident. However, CC wasn’t so lucky—once I set the stop-loss, the price immediately hit it, and I was stopped out. It then continued to make new lows. When I saw the email notification in the morning, I really felt uncomfortable.
This made me start to get tangled. Sometimes I think, maybe I shouldn’t set a stop-loss at all? Maybe if I hold on, the outcome will be different. But then I think, what if an extreme market occurs, and I wake up to find my account wiped out? That would be the end. So now I habitually set stop-losses; otherwise, I can’t sleep well.
Have you ever felt like you’re being "played"? Like you set your stop-loss, and the price just zigs right to it; you decide to hold on stubbornly, and it ends up blowing you out.
Later, I realized one thing: taking profit is about choosing where to get off the train, and stop-loss is essentially about choosing where to get on. The art of stop-loss is really about finding that most reasonable entry point—giving yourself some breathing room, but not being naive enough to risk a suicidal knife.