Many will tell you that the Market can go against a bit and then reverse back after taking your profits and then goes to your direction. I say this is just a little advantage of not setting stop loss, liquidation is definitely more sever than missing out on a trade just as you have experienced. My advice is still same set stop loss to avoid liquidation.
I traded two coins yesterday, if I set stop loss, I will lost my trading money, but the market reversed. When I made little profit, the market reversed back but I have close my position.
I always tell people that are trading with small amount of money and people that are averaging not to just set stop loss until the amount they are trading with is huge. If you are trading a small account, I still see reason to set stop lose, the reason is because when your capital is small, liquidation will hit you fast because the liquidation price of that pair will be very short. If you can remember
this topic.
For example I have $20 in my trading account and let's say you have $2k in your own account and we decided to take a long position for XRPUSDT and our entry price is $2.3, assuming I entered the trade with $10 and 20x leverage and you also entered the trade with $10 and same leverage, your liquidation price could be when XRP price drops to $0.9 while my liquidation price might be $1.99. So, if I don't set stop lose on my small account, I can easily get liquited but you will not be liquidated because XRP can not drop to $0.9 and you also have enough capital in your balance.
If I had enough capital in my account, I would not have been liquidated last night but I got wicked out and the market pulled back after 3 hours.
As a trader, do you prioritize making use of SL and TP and has it been helpful to you?
Is the advantage of SL and TP more dominant that the disadvantage?
Application of SL and TP in reality not really something I do use most of the time.
I have my phone and my laptop around me and I don't go out like that, I'm an indoor person so my trade is always free. This might not be the professional way of trading but my rules works for me and that makes me happy. In bull run, the market is always volatile, setting stop loss will just be chopping off your money because if the trend remain bullish, I'm not going to set stop loss even if I will be not be around near my device unless the trend changes.
Even if you look at your monitor all day while trading, if you are trading with a small balance without setting SL, you could be watching, believing that the market is going to reverse and right before your eyes liquidation will hit you
If you do futures, you will undersgand what I'm saying, for instance Bitcoin market slide down to $92k yesterday liquidating a lot of people and now it's back to trading above $100k again, if you have used stop-loss in the beginning, you will be out of the market by now and the market is back to where it went nuke. The only thing I do in this situation is I try to make sure that my liquidation is very low risk and use low leverage as possible so I don't get caught with the market manipulation.
It dropped to $90,800k. As for today's price surge, I will have to think that this news actually made the price to jump, because 2 hours after the news was released, price moved up above $100k.