#StopLossStrategies

What is a "Stop-Loss"?

A stop-loss is a smart risk management tool. It’s an automatic order to sell an asset when its price falls to a predetermined level—helping you cap your losses.

In simple terms:

“If this trade turns bad, I’m out before things get worse.”

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💼 Example:

You buy a stock at $100.

You set a stop-loss at $90.

If the stock drops to $90, your broker sells it automatically.

Result? You lose 10%—not more.

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🔧 Types of Stop-Loss Strategies:

1. Fixed Stop-Loss

Set a specific price or percentage to exit.

Example: Sell if the price drops 10% below what you paid.

2. Trailing Stop-Loss

Follows the asset’s price upward but never moves down.

Example: A 10% trailing stop—stock rises from $100 → $120, your stop-loss trails at $108.

3. Time-Based Stop-Loss

Exit after a set period if the trade isn’t performing.

Helps avoid holding stagnant positions too long.

4. Volatility-Based Stop-Loss

Adapts to how much the price fluctuates.

For volatile assets, a wider stop prevents getting kicked out on normal swings.

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🧠 Why Use a Stop-Loss?

Safeguards your capital

Removes emotion from trading decisions

Encourages discipline and consistent strategy

#StopLossStrategies