Professionals always have an exit strategy before they even enter a trade. That exit strategy contains conditions under which you assume the trade is no longer

Professionals always have an exit strategy before they even enter a trade. That exit strategy contains conditions under which you assume the trade is no longer good, and needs to be exited at a loss. Stop-losses are one mechanism for implementing that, but they are crude, and big players don't actually use them. In that regard, she was correct. For one thing, if you trade size, you don't want to dump everything with a marketable order at once, you have to scale out even if you are wrong. Secondly, some strategies will always perform worse if you add stop loss levels, notably mean reversion. But they can make sense, for instance, for trend following, because there are clear levels at which you can say that a trend has ended. Lastly, high-frequency traders like market-making firms, which Alameda was supposed to be, don't use stop loss orders, because they are not trying to take directional bets, they are just trying to capture the spread while keeping their book balanced.