#StopLossStrategies The same example with the direction reversed. We will use the same price **$84,644.2** for Bitcoin in our example, but assuming your analysis indicates a **downward trend**:
Basic steps:
Determine entry point:
- I decided to enter a sell position for Bitcoin at a price of $84,644.2 after confirming bearish signals (such as breaking support or forming a lower peak).
;;; Set stop loss; ;; ;:
- Place a "stop loss" order **above a strong resistance level** to avoid significant losses.
- Let's assume that the nearest strong resistance is **$85,144.2**.
- Here you will risk **$500** per unit (the difference between the entry price and the stop loss: 85,144.2 - 84,644.2).
. Determine profit-taking target:
- Use the same reward/risk ratio (**1:3**).
- The target will be:
84,644.2 - (500*3) = $83,144.2
- Expected profit per unit: **$1,500** (84,644.2 - 83,144.2).
. Trade size:
- If your capital is $10,000, do not risk more than 2% ($200).
- The number of units you can sell:
200/500= 0.4 units
Potential scenarios:
- If the price rises to $85,144.2:
- The trade will automatically close, and the loss = (0.4 \times 500 = $200) (2% of capital).
If the price drops to $83,144.2:
- The trade will automatically close, and the profit = 1500x0.4 = $600
