#StopLossStrategies #StopLossStrategies

How does Stop Loss work?

Let’s assume you buy 5 tokens at 5,000 USD each. The market can go up – but it can also crash. That’s why you set a Stop Loss at 4,000 USD. If the price drops to that level, the exchange will automatically sell your tokens – limiting losses and protecting your capital.

Thanks to Stop Loss:

- you know in advance how much you can potentially lose,

- you save time – you don’t have to sit in front of a chart,

- you avoid hasty decisions driven by emotions.

Why is it worth using Stop Loss?

- It teaches discipline and risk control.

- It helps make decisions without emotions.

- It protects capital in unpredictable market conditions.

- It is an absolute foundation of any serious investment strategy.

Where to set Stop Loss? 7 practical methods

Don’t set Stop Loss “by eye.” Here are some effective methods for setting it:

Trend lines – set SL just beyond the line, the breach of which may indicate a change in direction.

Pin Bar candles – a good time to set SL above/below the wick of the candle.

Inside Bar – set SL outside the parent candle if you want to play for trend continuation.

Moving averages (MA 50, MA 100) – place SL beyond the average line, treating it as dynamic support/resistance.

Consolidation zones – set SL outside the boundary of this zone.

Fibonacci levels – use them to determine “defense points.”

Bollinger Bands – SL can be just outside the upper/lower band.