What is a Stop Loss? And why is it your best friend in the market?
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If you enter trades without a "Stop Loss", you are walking in the market with your eyes closed. A stop loss is a tool that allows you to predefine the price level at which you exit the trade if it goes against you, to protect your capital from collapsing.
Example:
If you bought $BTC at $68,000 and set a stop loss at $66,000, you only lose $2,000$ if the trend reverses, instead of waiting and fearing a larger loss.
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Why is the stop loss important?
Prevents large losses
Protects your profits
Reduces stress while trading
Keeps you committed to a clear plan
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Tip for beginners:
> Don't set your stop loss too close to the entry point or too far away without a reason. Make it logical based on technical analysis.
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Do you always use a stop loss?
Share your experience or the biggest mistake you made when you ignored it!