#StopLossStrategies

Strategies for Stop Loss: The Key to Staying in the Trading Game

Many traders focus only on profit, but professionals know that staying in the market is more important than winning it once. This is where "Stop Loss" comes in as a crucial tool in risk management.

What is Stop Loss?

It is an automatic order used to determine a point at which the trade is closed to reduce losses when the price moves in the opposite direction of your expectation. Simply put: it protects you from losing all your capital due to a sudden market movement.

The Most Important Stop Loss Strategies:

1. Fixed Percentage Stop:

Set a specific percentage (e.g., 2% of capital) that you are willing to lose at most on each trade.

2. Support and Resistance Stop Loss:

Placed below a support area when buying, or above a resistance area when selling. This ensures that you exit the trade only if significant levels are broken.

3. Trailing Stop:

Moves with the price when it is in your favor, and locks in when the price starts to retreat. Ideal for protecting profits in a trending market.

4. Time-Based Stop:

Exits the trade after a certain time if the target is not met, even if the stop has not been hit. Useful in slow markets.

Golden Tip:

Do not change the stop loss location when the trade is losing, just to avoid exiting it. Your commitment to the plan is what makes the difference between a novice and a professional.