#StopLossStrategies

Stop loss is a crucial risk management tool used by traders to limit potential losses in volatile markets. One of the most common strategies is the fixed percentage stop loss, where a trader risks a set percentage of their capital—typically 1–2%—on each trade. Another widely used method is the volatility-based stop loss, which relies on indicators like the Average True Range (ATR) to place stops according to market volatility. Traders also use technical level stop losses, placing stops below support levels or above resistance levels based on chart patterns and price action. The trailing stop loss technique adjusts the stop price as the asset’s price moves in favor of the trader, locking in profits while allowing for further gains. Additionally, a break-even stop loss ensures that a winning trade doesn’t turn into a loss by moving the stop to the entry point once the trade is in decent profit. Lastly, a time-based stop loss is used when traders want to exit trades that fail to perform within a certain time period. Employing these strategies can significantly reduce risk and improve trading discipline, making them essential for both beginner and professional traders.

Source:

Investopedia - Stop Loss Order

BabyPips - Risk Management

TradingView - ATR Guide