#StopLossStrategies

Stop loss strategies are essential tools in risk management to protect your capital and limit losses in trading. Here are some effective stop loss strategies, when to use them, and why they work:

1. Percentage-Based Stop Loss

Example: Sell if price drops 5–10% below your entry.

When to use: Good for beginners and swing traders.

Why it works: Keeps risk predictable and disciplined.

2. Support/Resistance-Based Stop Loss

Example: Place stop just below a major support level.

When to use: When trading off chart patterns or key levels.

Why it works: If support breaks, trend likely continues down — better exit.

3. Volatility-Based Stop Loss (ATR)

Example: Use 1.5x the Average True Range (ATR) below entry.

When to use: In highly volatile assets like crypto or during news events.

Why it works: Gives room for natural price swings while protecting you if trend reverses.