*Stop-Loss Strategies to Minimize Losses*
A stop-loss order is an essential tool for traders and investors to limit potential losses. Here are some common stop-loss strategies:
*Types of Stop-Loss Orders*
1. *Fixed Price Stop-Loss*: Set a fixed price at which to sell.
2. *Percentage-Based Stop-Loss*: Set a percentage decrease from the purchase price.
3. *Trailing Stop-Loss*: Adjust the stop-loss as the price moves.
*Key Considerations*
1. *Risk Tolerance*: Set stop-loss levels based on your risk tolerance.
2. *Market Volatility*: Consider market conditions and adjust stop-loss levels accordingly.
3. *Investment Goals*: Align stop-loss strategies with your investment objectives.
*Example*
Set a 10% stop-loss on a $100 stock. If the price falls to $90, the stock is sold.
By implementing effective stop-loss strategies, traders and investors can minimize losses and protect their portfolios.