Trading without a stop loss is generally not recommended because it exposes you to significant risk. A stop loss is a risk management tool that helps protect your trading capital by automatically closing a position if the market moves against you beyond a predetermined level. However, there may be a few situations where traders consider not using a stop loss:
Long-term investments: If you're taking a long-term investment approach, rather than short-term trading, you might choose not to use a stop loss. In this case, you might have a higher tolerance for market fluctuations and believe in the long-term growth potential of the investment. However, it's important to conduct thorough research and have a solid understanding of the fundamentals before taking such an approach.
Small position sizes: Some traders may decide to forgo a stop loss when trading with very small position sizes, where the potential loss is manageable and would not significantly impact their overall portfolio. However, it's important to remember that even small losses can add up over time, and risk management should still be a priority.
Manual monitoring: In certain trading strategies, experienced traders may choose to closely monitor their positions and manually intervene if necessary, rather than relying on a preset stop loss order. This requires constant attention to the market and quick decision-making skills. However, it's important to acknowledge that market conditions can change rapidly, and being unable to react in time could lead to substantial losses.