When Should You Cut Loss?

Cut loss isn't admitting defeat — it's saving capital so you can fight another day. Successful traders and investors aren't those who never lose, but those whose losses are small and controlled. This page explains cut loss standards, how to determine them, and why mental preparation is just as important as the numbers.

Cut Loss Standards by Profile

Each profile has different cut loss standards: Trader (scalping/swing) • Cut loss: -3% to -5% from buy price • Reason: Traders work with thin margins and high frequency. A 3% loss on 1 position can still be covered by profit from other positions. • Example: Buy ANTM at Rp 2,000, cut loss at Rp 1,940 (-3%). Loss of Rp 60 per share. Investor (medium-long term) • Cut loss: -7% to -10% from buy price • OR when the investment thesis changes (declining profit, deteriorating business, management issues) • Example: Buy BBCA at Rp 9,500, cut loss at Rp 8,835 (-7%). Loss of Rp 665 per share. Additional rules: • Maximum loss per position: 1–2% of total portfolio • Example: Portfolio of Rp 50 million → max loss per position = Rp 500,000–1,000,000 • This determines HOW MANY LOTS you can buy, not the other way around

How to Set Your Cut Loss Point

Set your cut loss point BEFORE you buy. Not after. Not "let's see first." BEFORE. Method 1: Fixed percentage Simplest. Set -3%, -5%, or -7% from buy price. Method 2: Below support Place cut loss 1–2% below the nearest Support level. If support is at Rp 4,700, cut loss at Rp 4,600. Method 3: Based on ATR (volatility) For volatile stocks, cut loss can be wider. For example, 1.5x ATR (Average True Range) from buy price. Complete example: TLKM stock, buy price Rp 3,800. • Support 1: Rp 3,650 • Cut loss: Rp 3,600 (below S1, risk -5.3%) • Portfolio: Rp 30 million, max risk 2% = Rp 600,000 • Risk per share: Rp 200 • Maximum buy: 3,000 shares = 30 lots Calculate your position risk at the Risk Management Calculator.

Mental Preparation: Prepare to Lose Money

This is the most often ignored but most important part. Before buying any stock, ask yourself: "If all this money disappears, will my life be affected?" If the answer is yes — DON'T BUY. That's not investment money. The right mindset: • Treat every new position as "money that might be gone" • Cut loss is a learning cost, like paying for a course • 1 small cut loss (Rp 300,000) is far better than 1 large loss (Rp 5,000,000) that causes trauma • The best traders in the world are still wrong 40–50% of the time — they profit because their wins are BIGGER than their losses, not because they're always right If you cut loss 5 times in a row losing Rp 200,000 each (total Rp 1 million), but your 6th trade profits Rp 2 million — you're still up Rp 1 million. That's proper risk management.

Cut Loss Examples from Charts

TLKM — Telkom Indonesia (Persero) Tbk

TLKM Chart - Support, Resistance, cut loss point

See where TLKM's support lies — cut loss can be placed 1-2% below the nearest support.

View TLKM detail →

BKSL — Sentul City Tbk

BKSL Chart - Support, Resistance, cut loss point

BKSL is an example of a volatile stock — cut loss needs to be wider using the ATR method.

View BKSL detail →

Want to analyze other stocks? Open the Stock List

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Practical Tips

Set cut loss point BEFORE buying — write it down or set an alert
Maximum loss per position: 1–2% of total portfolio
Never move cut loss lower — that's called increasing risk
Cut loss is a learning cost, not a defeat

Common Mistakes

Not setting cut loss at all — "it'll go back up" (spoiler: sometimes it doesn't)
Moving cut loss lower to avoid losing — ending up with bigger losses
Cut loss too tight (1%) on volatile stocks — constantly getting stopped out even when direction is right
Revenge trading right after cut loss — buying random stocks to "get revenge"

Next Step

Calculate how many lots you can buy based on your risk tolerance and cut loss point.

Open Risk Management Calculator

FAQ

If I keep cutting loss, does it mean my strategy is wrong?

Not necessarily. If you cut loss at -3% and average profit is +8%, you can be wrong twice and right once and still profit. What matters is evaluation: was the entry at support? Was confirmation complete? Improve the process, don't avoid cut loss.

Do long-term investors need to cut loss?

Yes. Long-term investors cut loss when their investment thesis changes — for example, a company with consistent profit suddenly reports losses, or regulatory changes damage the business model. Not cutting loss on fundamentally broken stocks = waiting for a miracle.

When Should You Cut Loss?

Cut Loss Standards by Profile

How to Set Your Cut Loss Point

Mental Preparation: Prepare to Lose Money

Cut Loss Examples from Charts

TLKM — Telkom Indonesia (Persero) Tbk

BKSL — Sentul City Tbk

Learn More

Practical Tips

Common Mistakes

Related Reading

Next Step

FAQ

When Should You Cut Loss?

Cut Loss Standards by Profile

How to Set Your Cut Loss Point

Mental Preparation: Prepare to Lose Money

Cut Loss Examples from Charts

TLKM — Telkom Indonesia (Persero) Tbk

BKSL — Sentul City Tbk

Learn More

Practical Tips

Common Mistakes

Related Reading

Next Step

FAQ