Trading without a Stop Loss is like driving a car with no brakes: something bad will ultimately happen.
Instead, when you set the Stop Loss, you are asking your broker to close the trade if the price moves against your direction to a certain degree.
Essentially, you will accept a small (calibrated) loss in order to avoid a potentially devastating huge loss.
But once you understand that the Stop Loss is essential for long-term profitability, you need to decide where to set it.
Because if you set it too strict, you will get stopped out and you will lose money unnecessarily.
If instead, you are too generous, you will significantly decrease the long-term overall returns.
Luckily, you can understand where to set the Stop Loss very easily.
Most of the time, the price structure will help you a lot.
Additionally, there are Trading Indicators, like the Levels and Zones, that dramatically ease the task.
In fact, these indicators will clearly indicate to you where to place the Stop Loss order.
In today’s live trade discussed on the TradingView chart below, we were saved by the Stop Loss.
How did it save our trade?
Because we set the Stop Loss level correctly, even if the price initially moved against our direction, we were not stopped out.
And eventually, the price moved all the way down to the Take Profit level, closing a very profitable trade.