What Happens If You Don’t Use a Stop-Loss?
If a trade moves against you without a stop-loss in place:
You may incur significant losses before you have a chance to manually close the trade.
If the loss exceeds the daily drawdown limit, your account will be breached and closed.
If you exceed the total drawdown limit, your account will be permanently terminated.
For evaluation accounts, breaching a drawdown limit means you will need to purchase a new challenge to start over.
Why Should You Use a Stop-Loss?
A stop-loss is an essential risk management tool that:
Limits potential losses by automatically closing a trade at a predefined level.
Protects your account balance from rapid market reversals.
Helps you stay within the daily and total drawdown limits, reducing the risk of breaching your account.
Prevents emotional decision-making, allowing for a more disciplined trading approach.
Managing Risk Effectively
Successful traders incorporate stop-loss orders as part of their strategy to maintain consistency and control risk. Without a stop-loss, even a single unexpected market move can lead to account closure.
To minimise risk, it is strongly recommended to set appropriate stop-loss levels on every trade. This ensures you remain within the allowed drawdown limits and continue trading without unnecessary risk.
If you have any questions about risk management, feel free to contact our support team.