Stop Loss Strategies – Protect Your Investments
A stop loss is a risk management tool that automatically sells your asset when it reaches a certain price. It's designed to limit your losses if the market moves against you.
Here are some common stop loss strategies:
1. Fixed Stop Loss: Set a specific price where your position will close (e.g., sell BTC if it drops 5%).
2. Trailing Stop Loss: This follows the price as it moves up, locking in profits. If the price drops by a set percentage from its peak, it triggers a sell.
3. Percentage-Based Stop Loss: You decide what percentage of loss you're willing to accept (e.g., 2%, 5%, etc.).
4. Volatility-Based Stop Loss: This strategy adjusts your stop loss based on how volatile the asset is—wider stops for more volatile markets.
5. Time-Based Stop Loss: You exit a trade after a certain period if the target price isn’t hit, to avoid staying stuck in a bad trade.
