#StopLossStrategies
A stop-loss strategy is an essential risk management tool that helps traders limit losses by automatically closing a position when the price moves unfavorably.
One basic method is the fixed percentage stop, where you set a stop-loss at a set percentage from the entry price (e.g., 5% below $100 = $95 stop). It’s simple but may not suit volatile markets.
Another approach uses support and resistance levels, placing stops just beyond key price zones to avoid premature exits. However, identifying these levels can be subjective. Moving averages also serve as dynamic stop levels, adjusting to trends, though they lag in response.
Each method has pros and cons and should match market conditions.
