> It's true that they can stop losses, but it could also lead you to sell at the bottom and at the worst price. Worse, in relatively illquid (and circuit brea

> It's true that they can stop losses, but it could also lead you to sell at the bottom and at the worst price. Worse, in relatively illquid (and circuit breakerless) markets like the fringe cryptocurrencies they were investing in, stop losses can easily result in selling at absurd prices and can even be manipulated to do so. There was even a lawsuit against FTX for exploiting them. E.g. say something is trading at $105 after falling a bit and you believe there are significant stop loss orders at $100 (perhaps aided by exchange insider knoweldege), you see that there is very little volume on the order book below $100. You then put in a huge buy wall at $10... sell down to $100 to trigger the stop losses, then laugh as idiotic stop losses dump coins into your $10 wall. Moments later the asset is trading at $101 again. In large liquid markets they're less risky because someone will usually hop up and take the deal at $99 so even though you get burned a little it usually won't be too bad. But cryptocurrency markets, particularly for the fringe scamcoins FTX was investing in are just not very liquid.