Protective Stops are one of the simplest but most powerful tools in trading. They don’t just protect your account — they protect your psychology, discipline, and long-term survival.
📌 What Is a Protective Stop?
A protective stop is a pre-set exit level placed before entering a trade. It defines how much you are willing to lose if the market goes against your position.
This means you are never “hoping” for the market to turn — your risk is already controlled.
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📍 How It Works.
1. Identify the Structure
In the image, price is approaching a resistance line. Once price breaks out above that resistance, traders look for a continuation.
2. Confirmation After Breakout
After the breakout, price pulls back. Smart traders wait to see if price respects the new support level (old resistance).
3. Place the Protective Stop
The protective stop is placed below the pullback area or below a logical structure such as:
A swing low
A trendline
A support level
This ensures: ✔️ Small controlled loss ✔️ High potential upside if breakout continues
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🔍 Why Protective Stops Matter
1. They Preserve Capital
Your stop defines the maximum you can lose — before the trade even starts.
2. They Remove Emotional Decisions
No panic. No fear. No holding losing trades “hoping it comes back.”
3. They allow consistent risk per trade
You can set stops based on:
Percentage (1%–2%)
Price points
Monetary amount
Technical levels
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💡 Key Takeaway
A protective stop is not a sign of weakness — it’s evidence of a disciplined trader who plans before acting.
Great traders don’t guess. They manage risk first, profits second.
Some say FLOKI is over… But looking at the chart it feels like the calm before the storm! Yes, the price dropped, but history shows when FLOKI goes quiet, it’s usually planning something big. What do you think is this the time to buy the dip? Share your thoughts in the comments 👇
Only Allah knows when dreams will come true. One day, Insha’Allah, this zero will turn into something great. I humbly ask everyone to stay by my side and support me. #Flower #everyone #higlight #earn #squarecreator