#StopLossStrategies What is Stop Loss?
Stop Loss is a trading tool that allows you to automatically close a position when a specified loss level is reached. It helps investors limit losses and preserve capital.
Why use Stop Loss?
Financial markets are subject to fluctuations. Even the most promising investments can drop sharply. Stop Loss helps avoid emotional decisions and limit losses in advance.
Popular Stop Loss strategies:
1. Fixed percentage
You set an acceptable loss level — for example, 5% of the entry amount. If the price falls below this level, the position is automatically closed.
2. Support/resistance level stop
The order is placed slightly below the support level (for a long position) or above the resistance level (for a short position), where there is a high probability of trend reversal.
3. Trailing stop (dynamic)
The Stop Loss moves along with the price in a profitable direction. This allows you to secure profits if the market reverses.
4. Volatility stop
The stop level is calculated based on the current volatility of the asset (for example, using the ATR indicator). Suitable for active traders.
Advantages of Stop Losses:
Protection against significant losses
Discipline and emotional control
Trading automation
Confidence in risk management
Important: Stop Loss does not guarantee 100% protection, especially in highly volatile markets where slippage can occur (the price skips over the order). But with the right strategy, it is a powerful tool in the investor's arsenal.$BTC
