Why do ppl do knockout trading?

[Jesus_ist_König]

I just dont understand it. PPL do knockout with leverage, but why not use the leverage alone? Why the knockout? How do they benefit from knockouts?
@ilovearcherqueen

 

[shedontluv-U]

I really wanna know to

I wanna be financially stable nigga

 

[Jesus_ist_König]

I really wanna know to

I wanna be financially stable nigga

Chatgpt says that the devirate is more exact but thats it i just dont get it

 

[shedontluv-U]

Chatgpt says that the devirate is more exact but thats it i just dont get it

I don't want to ask chatgpt, I want to ask real people.

I'm already having trouble understanding how to manage my credit score

Like real experience

 

[polonaecel]

I don't want to ask chatgpt, I want to ask real people.

I'm already having trouble understanding how to manage my credit score

Like real experience

This is the first time ive seen you speak in perfect grammar

 

[Jesus_ist_König]

@Seth Walsh @ilovearcherqueen I cant understand why knockout trading exists if you can just do normal trading with a leverage?

 

[ilovearcherqueen]

@Seth Walsh @ilovearcherqueen I cant understand why knockout trading exists if you can just do normal trading with a leverage?

Its just betting with SL/TP instead from what i understand.
People knockout trade so if the price swings down, you know your guaranteed loss. For example a CFD swings down and it hits your stop loss (expected to lose 200) but due to margin calls and slippage you end up losing a 1000. Where are a knockout just guarantees your loss if it goes down which gives peace of mind.

Reason why people just trade with normal leverage since it unlocks bigger positions with less cash, which gives them higher profits but can also amplify the losses. Its basically high risk high reward.

 

[Jesus_ist_König]

Its just betting with SL/TP instead from what i understand.

i dont get it?

People knockout trade so if the price swings down, you know your guaranteed loss. For example a CFD swings down and it hits your stop loss (expected to lose 200) but due to margin calls and slippage you end up losing a 1000. Where are a knockout just guarantees your loss if it goes down which gives peace of mind.

Reason why people just trade with normal leverage since it unlocks bigger positions with less cash, which gives them higher profits but can also amplify the losses. Its basically high risk high reward.

still doesnt make any sense. Lets say a buyer goes long with 5x leverage. His knockout is at 200€. When the devirate hits 200€ or goes below he loses all of his money.

But lets say without a knockout and 5x leverage he would have lost all of his money at 100€ so the knockout is stupid since you cant lose more money than you put in?? so it still doesnt make any sense to me?????

 

[ilovearcherqueen]

i dont get it?

still doesnt make any sense. Lets say a buyer goes long with 5x leverage. His knockout is at 200€. When the devirate hits 200€ or goes below he loses all of his money.

But lets say without a knockout and 5x leverage he would have lost all of his money at 100€ so the knockout is stupid since you cant lose more money than you put in?? so it still doesnt make any sense to me?????

They are there for to protect against weekend gapping and slippage/margin calls. If your stop loss hits with a normal CFD position there is a good chance that you lose more money due to slippage and gapping and you cant do much after that. If your SL hits in a knockout then you only lose a certain amount.


Imagine you've got £1000 in your trading account and use 5x leverage to control a £5000 position. You set your risk at a 4% drop, aiming to lose just £200.

Normal trading :
Market gaps down 10% overnight (think news crash). Your stop was supposed to trigger at 4%, but:

• It slips past due to chaos
• Broker sends margin call warnings at 2-3% drop
• Account gets force-closed early
• £1000 gone. You're wiped out, stressed from alerts.

Knock-out trading is calmer:
Same gap happens. Barrier hits at exactly 4%:

• Only £200 lost. Account now £800.
• No warnings, no surprises.
• Jump back in with remaining cash tomorrow.

 

[Jesus_ist_König]

They are there for to protect against weekend gapping and slippage/margin calls. If your stop loss hits with a normal CFD position there is a good chance that you lose more money due to slippage and gapping and you cant do much after that. If your SL hits in a knockout then you only lose a certain amount.


Imagine you've got £1000 in your trading account and use 5x leverage to control a £5000 position. You set your risk at a 4% drop, aiming to lose just £200.

Normal trading :
Market gaps down 10% overnight (think news crash). Your stop was supposed to trigger at 4%, but:

• It slips past due to chaos
• Broker sends margin call warnings at 2-3% drop
• Account gets force-closed early
• £1000 gone. You're wiped out, stressed from alerts.

Knock-out trading is calmer:
Same gap happens. Barrier hits at exactly 4%:

• Only £200 lost. Account now £800.
• No warnings, no surprises.
• Jump back in with remaining cash tomorrow.

Okay i get it so knockout is just the safer but unpractical version of stop loss?

 

[shedontluv-U]

This is the first time ive seen you speak in perfect grammar

Nigga what are you talking about

 

[ilovearcherqueen]

Okay i get it so knockout is just the safer but unpractical version of stop loss?

You got it. the broker basically covers that risk if you pay a fee for a knockout trade

 

[polonaecel]

Nigga what are you talking about

You always make a mistake in grammar while typing

 

[shedontluv-U]

You always make a mistake in grammar while typing

Are we deadhahh

 

[Jesus_ist_König]

You got it. the broker basically covers that risk if you pay a fee for a knockout trade

Thank you a lot