#StopLossStrategies Stop Loss Strategy That Prevents You from Getting Stuck at the Top

Honestly, I was very stubborn about stop-losses. I felt sure that the price would go back up, and in the end, I was stuck for months. From that, I learned that a stop-loss is not meant to be about "giving up," but rather a survival strategy to avoid sinking further.

Now, I have several stop-loss strategies that I use depending on the situations. The most common one I use is a percentage-based stop-loss. For example, if I buy asset A at $1, I set a stop-loss at 10% below, so at $0.90. So if the price drops to that level, it sells automatically. This gives me a loss limit that I can accept.

Then, there is also what is called a trailing stop-loss. It’s really cool. So the stop-loss follows the price movement. For example, if I buy ETH at $2000 and I set a trailing stop-loss of 10%. If ETH goes up to $2500, the stop-loss also rises to $2250. But if ETH goes down and hits $2250, it sells immediately. The advantage is that you can protect profits while having a limit to not fall too low.

I have also used a stop-loss based on a support level. So I first look at the chart, I look for the nearest support point. For example, if the support is at $0.80, I will set the stop-loss just below it, for example at $0.78. If the price breaks the support, it tends to continue to drop, so it's better to get out before.

For instance, during the market crash in early 2022, I had ADA that I bought at $1.40. I set a stop-loss at $1.25 (about 10%). Well, a week later, it fell below $1. Fortunately, it sold at $1.25, so I only lost a little. If I hadn’t used a stop-loss, I might still be stuck today.

Basically, using a stop-loss is like having an emergency brake.