Aside from the particular trading strategy you use to navigate and trade the markets, ‘where you place your stop loss’ is arguably the most important aspect of every trade you take. However, these beliefs are simply not true and for any experienced trader who understands trade position sizing, it is obvious that it is the contract size (number of lots) traded that determines the risk per trade, not the stop loss distance by itself. The two main reasons why so many traders lose money and blow out their accounts are: Trading too much (over trading) and using stop losses that are too tight (not letting the trade have room).