#StopLossStrategies Stop Loss Strategies That Prevent You From Getting Stuck at the Peak
Honestly, I used to be really stubborn about stop-loss. I felt confident that the price would bounce back, but in the end, I got stuck for months. From there, I learned that stop-loss is not 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 situation. The one I use most often is the percentage-based stop-loss. For example, if I buy coin A at $1, I set a stop-loss 10% below that, at $0.90. So if the price drops to that point, it sells automatically. This sets a limit on the loss I can accept.
Then there’s also something called a trailing stop-loss. This is really cool. So the stop-loss follows the price movement. For example, if I buy ETH at $2000 and set a trailing stop-loss of 10%. If ETH rises to $2500, the stop-loss also rises to $2250. But if ETH drops from there and hits $2250, it sells immediately. The nice thing about this is that we can protect our profits while still having a limit to prevent falling too deep.
I have also used support level stop-loss. So I look at the chart first, find the nearest support point. For instance, if support is at $0.80, I would set the stop-loss just below it, say at $0.78. If the price breaks through support, it usually continues to drop, so it's better to exit early.
For example, during the market drop in early 2022, I held ADA that I bought at $1.40. I set a stop-loss at $1.25 (about 10%). Sure enough, a week later it plummeted below $1. Luckily, it sold at $1.25, so I only lost a little. If I hadn't used a stop-loss, I might still be stuck now.
The bottom line is that using a stop-loss is like having an emergency brake. We can't control the market, but we can control how much we want to lose. And most importantly, after hitting a stop-loss, don’t rush to buy again to get revenge. Evaluate first, take a breath, then take the next step.
Disclaimer: Includes third-party opinions.
