Why do so many people open positions without ever setting a stop loss?

It's not that they don't understand how important a stop loss is. The problem is that, when the moment to close the position at that stop loss price actually arrives, psychologically it's very hard to accept losing money.

Losses represent more than just a reduction in your account balance — even more harshly, they force you to admit that your judgment was wrong. At that moment, human instinct is to avoid: hold on a little longer and see if it can rebound. This thought often feels more convincing than any technical analysis.

If you haven't considered your psychological defenses before placing an order, when the market starts moving against your expectations, executing a stop loss becomes the most torturous decision.

Want to break this vicious cycle? The solution is actually quite straightforward: first, calculate how much loss you can tolerate; then, based on that number, determine your position size; finally, open the position. Doing so turns the stop loss from an emotional dilemma into a purely technical execution.