#StopLossStrategies Stop-loss strategies help limit potential losses in trading by automatically selling assets when they reach a specific price. Here are some of the most common and effective:
1. Fixed Percentage Stop-Loss
How it works: Sets a stop-loss at a fixed percentage below the purchase price (for example, 5% or 10%).
Best for: Simple setups and beginners.
Example: Buy ETH at $2,000. Set the stop-loss at 10% → Sell at $1,800.
2. Trailing Stop-Loss
How it works: The stop-loss follows the asset's price as it rises, locking in profits. If the price falls a set percentage from its peak, it triggers.
Best for: Trending markets.
Example: Set the trailing stop at 5%. If the price goes from $2,000 to $2,200, your stop moves to $2,090.
3. Support-Based Stop-Loss
How it works: Places your stop-loss just below a key support level.
Best for: Technical traders using chart patterns.
Example: If ETH has support at $1,900, set your stop slightly below, like $1,880.