#StopLossStrategies

Stop-Loss Strategies: Protecting Your Portfolio

A stop-loss strategy is a key risk management tool used by traders and investors to limit potential losses. It involves setting a predefined price at which a security will automatically be sold if it moves against your position. The main goal is to protect capital and avoid emotional decision-making during market volatility.

There are several types of stop-loss strategies:

Fixed Stop-Loss: Set at a specific price point, regardless of market conditions.

Trailing Stop-Loss: Moves with the market, locking in profits as the price rises while still providing downside protection.

Percentage-Based Stop-Loss: Based on a percentage of the entry price, commonly used to maintain consistency across trades.

Using stop-losses effectively can help you stick to a disciplined trading plan, avoid large losses, and preserve capital for future opportunities. While it doesn’t guarantee profits, it’s a smart safeguard in any investment strategy.