A stop-loss is not a prediction. It is the price at which your reason for being in the trade has been proven wrong. Deciding it in advance is what makes it a decision rather than a reaction.
The arithmetic nobody likes
Losses and the gains needed to recover them are not symmetrical:
| You lose | You then need |
|---|---|
| 10% | +11% to get back to flat |
| 25% | +33% |
| 50% | +100% |
| 80% | +400% |
This is why survival comes before profit, and why one unbounded loss can undo months of good decisions. A stop is what bounds it.
What a stop is not
- Not a suggestion. A stop you move away from is not a stop.
- Not a forecast. It does not say the market will stop there. It says that if it gets there, you were wrong.
- Not optional on "obvious" trades. The trades that feel most certain are the ones people size up and skip the stop on. That combination is what ends accounts.
How the Lab enforces it
Trading without a stop is flagged live by the coach and costs you heavily on the risk component of your Decision Quality Score — whether or not the trade made money. The first mission in the curriculum is exactly this: a stop on every trade, no exceptions. The Perfect Stop badge is for a session where you did it every single time.
Widening is worse than not setting one. Moving a stop
further away as price approaches it converts a small planned loss into a large unplanned one,
and it teaches you that your rules are negotiable. Trailing a stop towards price is
fine — that is the TRAIL SL button, and it never widens.
Reminder. The Trading Lab is an educational simulation running on synthetic data with play capital. Nothing here is investment advice, no buy or sell call is given on any real security, and no claim is made about returns.