Trading Basics for Beginners

Introduction

There’s been a big claim floating around recently by some so-called “renowned” traders that’s stirred up quite a bit of debate in trading communities. They’ve stated that “real traders don’t use stop loss orders,” which has captured the attention of many beginners. But if you’re just getting started in trading, should you really ignore stop loss orders altogether? By the end of this article, you’ll understand the truth behind these bold claims—and the valuable lessons you can apply to become a better trader yourself.

Do Real Traders Use Stop Loss Orders?

So, do “real traders” use stop loss orders? I know quite a few who do. Some might enter them directly as standing orders, while others use what’s called a “mental stop.” Either way, every top trader I know has a clear exit point—and so should you. I believe the original statement meant that experienced traders often don’t place standing stop loss orders in the same way most beginners do.

Traders who manage large positions tend to keep their stop points private because they don’t want brokers or market makers to target them. However, these professionals usually have junior traders monitoring positions full time and ready to exit the trade the moment the stop is triggered. That doesn’t mean you should do the same, especially when you’re just starting out. The gap in discipline and experience between new and professional traders is vast.

Don’t Try This at Home If You’re Still Learning

Just because seasoned traders might not place a visible stop loss order with their broker doesn’t mean you shouldn’t. As a beginner, you likely don’t have the experience or discipline to rely on a mental stop. It’s a risky approach, and even the slightest hesitation can lead to significant losses. At this stage, the risk of making emotional trading errors is far greater than any threat of having your stops hunted.

When you’re learning the ropes, it’s critical to build strong structure into your routine. That means following a proven trading strategy and placing all stop and limit orders directly into the market. By creating an environment that supports discipline and emotional control, you’ll be far more likely to develop the skills needed for long-term success.

About the Author
Thad B. is a professional trading systems developer who has designed and managed dozens of successful strategies for a private hedge fund. He’s passionate about trading systems and offers a wealth of resources for serious traders looking to grow their skills and profitability.

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