One of the most important techniques in risk management for traders is the efficient use of stop loss. Stop loss strategies allow for limiting losses in case the market moves against one's position. Some traders prefer fixed stop losses, while others adjust them dynamically based on market volatility. A good strategy considers one's risk profile, time horizon, and the nature of the specific market. Properly implementing a stop loss can make the difference between a contained loss and a disastrous one. It is a simple yet powerful tool.
