/biz/ - Business & Finance

Stop losses seem like a weird crutch to me. If you're investing in long-term holds, then you need to tolerate some ups and downs and not be spooked by a potentially temporary dip. If you're doing swing trading or day trading where you'll make quick moves based on short term price changes, then you need to be watching the market closely in order to work your strategy, so you don't need a stop-loss because you're right there looking at the market ready to sell if necessary. I don't see where the stop-loss really fits in to any of those scenarios. I guess maybe if you're going on vacation to some weird time zone like Japan and you're worrying about some Enron-like collapse happening while you're sleeping over there, then I guess it's a tail-risk instrument, but you could also just buy some puts for that instead.