#StopLossStrategies A stop-loss strategy is a risk management technique used by traders and investors to limit potential losses on an investment.
What it is:
You set a predefined price level at which you'll sell an asset (like a stock or crypto) if its price drops to that level. This helps prevent bigger losses if the market moves against you.
Types of Stop-Loss Strategies:
Fixed Stop-Loss:
You set a specific price (e.g., "Sell BTC if it drops below $60,000").
Percentage Stop-Loss:
You sell if the price drops by a certain percentage (e.g., 10% below your buy price).
Trailing Stop-Loss:
The stop price moves up as the asset’s price rises but doesn’t move down if the price falls.
Example: You buy at $100 with a trailing stop of $10. If the price rises to $120, the stop-loss becomes $110. If it drops after that, it sells at $110.