Stop loss is a powerful tool to protect your investments. It allows you to automatically limit your losses if the price of an asset, such as Solana ($SOL ), or any other coin, falls below a certain level.
With the Solana market fluctuating in a range of $222.13, a stop loss can be an important strategy to manage risk and protect your capital in such a volatile market.
How does a stop loss work?
You set a stop loss using two main values:
1. Trigger price (stop price): this is the value that activates the sell order.
2. Limit price: This is the price at which you want to sell the asset.
When the market price reaches the initial price, Binance creates a sell order at the set limit price. This helps reduce losses during sharp downward movements.
Practical example with Solana (SOL):
Imagine you bought SOL for $222.13 and want to protect your investment:
• Shooting price: $215.00
• Limit price: $213.00
If the price of SOL drops to $215.00, Binance will initiate a sell order at $213.00, protecting your capital from a possible sharper drop.
How to set a stop loss on Binance:
1. Open Binance: on the website or in the app.
2. Go to the SOL trading page: find Solana in the market tab.
3. Select the "Stop-Limit" option: located on the order panel.
4. Adjust the values:
• Shooting price: $215.00
• Limit price: $213.00
• Quantity: Enter the quantity of SOLs to be protected.
5. Confirm: Click "Sell" to activate the stop loss order.
Last tip:
If you believe the Solana market has upside potential, a stop loss is a way to manage risk while preserving your position for potential upside. Check out this strategy now and protect your investment while preparing for future opportunities!