Stop-Losses: Your Eject Button

🧠 Why it matters

A STOP-LOSS automatically sells a position once it drops to a price you set, limiting your loss before it turns catastrophic. Set it the moment you buy. One catch: it fills at the next available price, so if a stock gaps down overnight you can be sold well below your stop — it limits damage, it doesn't guarantee a price. The point isn't to be right — it's to make sure being WRONG is survivable. A 10% loss needs an 11% gain to recover; a 50% loss needs a brutal 100% gain. Small losses are cheap; big ones can end you.

🌍 In the real world

💡 The math that scares pros: lose 50% and you don't need +50% to get back — you need +100%. That asymmetry is why capping losses early matters infinitely more than catching every win.

📌 Takeaways

• A stop-loss auto-sells to cap your loss
• Set it when you enter the trade
• Big losses need disproportionately bigger gains to recover

✅ Test yourself