#StopLossStrategies Stop-loss strategies in crypto trading are essential for protecting your capital from big losses in a volatile market. Here are some common and effective approaches:
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### **1. Percentage-Based Stop Loss**
- **How it works:** Set a stop loss based on a fixed % drop from your entry price.
- **Example:** Buy ETH at $3,000, set a stop loss at 10% → Sell if price hits $2,700.
- **Good for:** Simple, straightforward risk management.
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### **2. Volatility-Based Stop Loss**
- **How it works:** Set your stop loss based on the asset’s recent volatility.
- **Tools:** Use indicators like Average True Range (ATR) to calculate a buffer.
- **Good for:** Avoiding getting stopped out too early on coins with wild swings.
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### **3. Support/Resistance Stop Loss**
- **How it works:** Place your stop just below a known support or above a resistance level.
- **Example:** BTC has support at $60k → place stop at $59,500.
- **Good for:** Swing traders using technical analysis.
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### **4. Trailing Stop Loss**
- **How it works:** Your stop follows the price upward and locks in gains as the price rises.
- **Example:** Price rises from $1.00 to $1.20, trailing stop moves up too. If price dips 5%, it sells at $1.14.
- **Good for:** Riding trends while protecting profits.
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### **5. Time-Based Stop Loss**
- **How it works:** Exit a position after a certain period if it hasn’t moved as expected.
- **Example:** If no breakout happens in 7 days, sell.
- **Good for:** Day/swing traders with tight timeframes.
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### **Tips for Using Stop Losses in Crypto:**
- Avoid setting stops at obvious round numbers—they get hunted.
- Use limit orders (not market) to avoid bad slippage in low-liquidity coins.
- Don't rely only on stop-loss—position sizing and risk management are key.
