To limit potential losses in trading, there are several types of stop-loss strategies, including:
1. **Stop-Loss Based on Agreement**:
- Traders use support and resistance levels, moving averages, previous highs and lows, Fibonacci retracements, trend lines, and channels to determine stop-loss points.
- This method may be prone to short stops if the points used are too clear.
2. **Stop-Loss Based on Volatility**:
- This strategy adapts to changing market conditions. When volatility is high, a larger stop-loss is used to accommodate significant market changes. When volatility is low, a smaller stop-loss is employed.
- Indicators such as the Average True Range (ATR) or the Volatility Index (VIX) can be used to determine stop-loss levels based on