#StopLossStrategies

In trading, a stop-loss is a pre-determined price level at which a trade is automatically closed to limit potential losses, while a target price is the desired price level where a trader aims to exit a trade to secure profits.

Here's a breakdown of stop-loss and target prices:

Stop-Loss:

Definition:

A stop-loss order is a type of order placed with a broker to automatically sell a security (or close a position) if its price drops to a specified level (the stop-loss price).

Purpose:

The primary purpose of a stop-loss is to limit potential losses in a trade.

How it works:

If the price of a security moves against the trader's position and reaches the stop-loss price, the order is automatically executed, and the position is closed.

Types:

Market Stop-Loss: Triggers a market order to sell shares at the best available price.

Limit Stop-Loss: Specifies a minimum price at which shares are sold.

Benefits:

Limits losses, maintains discipline, and protects capital.