#StopLossStrategies

Stop-Loss Strategy: A Smart Risk Management Tool

A stop-loss strategy is a crucial risk management technique used by traders and investors to protect capital. By setting a predetermined price level, it automatically triggers the sale of a security if its price moves against the position. For example, buying a stock at $100 with a stop-loss at $95 limits the potential loss to 5%. This strategy helps minimize emotional decision-making, safeguard investments, and maintain consistent trading discipline in volatile markets.