Historical test result
No stop on crypto: one day -13.7 %.
Without a stop the crypto rule still lost and had a -13.7 % day, far beyond any daily loss limit. On a 100,000 dollar challenge that day would cost you about 13,700 dollars and break any daily loss limit.
Why the idea sounds right
Many traders feel a stop closes a good trade too soon. They watch price pull back a little and then keep going, and they think the stop stole a win. They start to feel the trade needs room, so they take the stop away. Removing the stop lets a momentum trade breathe. That sentence sums up the hope. A stop is a preset exit that closes your trade at a fixed loss. Momentum means price keeps moving in the same direction for a while. You hope the move resumes. You tell yourself you will watch the screen and close by hand if you must. You feel calm when price moves your way. You feel sure you can handle a drop. You forget how fast a bad day can grow. You think you will act in time.
What I tested
I ran the test on BTC, ETH and LTC from 2019 to 2023. I used one simple momentum rule for the test. The rule stayed the same through the whole test. I ran it without a stop. You see real market moves from those years. I kept the test simple so you can follow it. You do not need to know the entry details to learn from it. You only need to see what the lack of a stop allowed. You can use the same lens on your own rule.
What the result means for you
Your daily loss limit is the most you may lose in one day before the challenge ends. One bad day can end your challenge even if your other days were calm. That is what happened in this test. The rule ended negative without a stop. A single day fell far past any daily limit you would sign. You would face a large dollar loss on a challenge account. You would break the rule that guards your account. You would lose the challenge on that day. Think of your own account size and what a day like that would take from you. You pay to join a challenge and you trade under strict rules. The daily limit guards your account from a deep fall. When you cross it, the challenge stops. Your fee is gone and you must start over if you want another try.
What I do
I never run a momentum rule without a stop because the test showed the loss can grow past any daily limit. You keep your risk capped when you keep the stop. You know the most you can lose before you enter. You avoid one day that wipes out your challenge. I would rather skip a trade than face a loss past my daily limit. You protect your challenge when you accept small losses. You stay in the game for the next day. You keep your account alive.
Check your own report
You can do this in five minutes. Open your own report and compare your largest daily loss with your daily loss limit. Pull your daily results for the test period. Find the day with the largest loss. Read that loss as dollars and as a share of your account. Ask if that day would break your daily limit. If it would break the limit, your rule needs a stop before you pay for a challenge. You learn more from that one day than from a calm week. You see if your rule respects the limit you must keep.
Limits
These are historical test results, not a live account. You should check your own rules the same way before you risk real money.
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