/biz/ - Business & Finance

I haven't had a good night's rest in months now

>Assume they buy a stock at $15, expecting it to go higher, and place a stop loss (a stop sell order which exits the trade) if the price drops to $14.90. The trader buys 3000 shares, because if they lose the $0.10 per share ($15 – $14.90) on 3000 shares, they have only lost $300, or 1% of their account. With a looser stop loss at 14$, he can buy 300 shares at 15$. In both cases he loses 300$ if the stop is triggered. The looser the stop the smaller the profit

How does this make any sense? Changing your stop loss doesn't change your profit in any way only how much you can potentially lose. Why would anyone bother with anything but an infinitesimally small stop loss to prevent losing money at all? I don't get it.

From https://pastebin.com/sqJUcbjp
>Assume they buy a stock at $15, expecting it to go higher, and place a stop loss (a stop sell order which exits the trade) if the price drops to $14.90. The trader buys 3000 shares, because if they lose the $0.10 per share ($15 – $14.90) on 3000 shares, they have only lost $300, or 1% of their account. With a looser stop loss at 14$, he can buy 300 shares at 15$. In both cases he loses 300$ if the stop is triggered. The looser the stop the smaller the profit

How does this make any sense? Changing your stop loss doesn't change your profit in any way only how much you can potentially lose. Why would anyone bother with anything but an infinitesimally small stop loss to prevent losing money at all? I don't get it.