#StopLossStrategies

Stop Loss strategies on Binance are essential to protect your capital and limit losses in case the market moves against you. Here, I explain the main strategies and how to use them:

1. Traditional Stop Loss (Limit or Market)

Stop Limit: You define the price at which the order is activated (stop) and the price at which it is executed (limit).

Stop Market: A sell order is activated at the market price when the stop is reached.

Example: You bought BTC at $80,000 and want to limit your loss to 5%.

You place a Stop Market at $76,000.

If BTC drops to $76,000, it is automatically sold at the best available price.

2. Dynamic Stop Loss (Trailing Stop)

The Trailing Stop follows the price in a favorable direction but stops if the market retraces.

It is defined with a percentage of “retracement”.

Example: You bought BTC at $80,000 with a Trailing Stop of 3%.

If BTC rises to $85,000, the stop adjusts to $82,450.

If BTC falls 3% from the maximum, it is automatically sold.

3. Technical Levels Strategy

You place the stop just below a key support or moving average.

This helps prevent the stop from being activated by small market movements.

4. Use of ATR (Average True Range) Multiples

ATR measures volatility. You can place the Stop Loss at 1.5x or 2x the ATR from your entry point to avoid being knocked out in volatile markets.