# Trading Iron Laws: Stop Loss is Your Only Lifeline

"One loss without a stop loss can wipe out 100 of your past profits."

**Stop loss is not failure:** Stop loss is the cost of trading, just like paying rent to operate a store. Refusing to stop loss is refusing to admit mistakes, and ultimately you'll be forced to capitulate by the market (liquidation).

**Don't hold losing positions:** In the stock market you can hold for years waiting to break even. In crypto, a 90% drop in a day is normal, and it may never recover. Holding losing positions is the fastest route to liquidation.

**Risk/reward ratio > Win rate:** You don't need to be right every time. If you lose $100 per trade but profit $300, even if you lose 4 times and win once, you're still making money. Pursue a high risk/reward ratio, not a high win rate.