Good protection for trading capital

📉 What is a Stop Loss Order? And how can it protect your investments?

A Stop Loss order is a basic trading tool that aims to reduce potential losses when the market moves against your expectations. Simply put, it is an automatic order that sells your assets when the price reaches a pre-determined level.

Practical example:

You bought a currency at $50.

You expected it to rise, but you placed a Stop Loss order at $45.

If the price drops to $45, the currency is automatically sold to avoid larger losses.

Benefits of using a Stop Loss:

1. Protect capital from large losses.

2. Reduce psychological stress during sharp fluctuations.

3. Maintain your strategy and do not get carried away by emotions.

Tip:
Set a Stop Loss based on market analysis, and do not make it too close to the purchase price to avoid triggering it due to natural fluctuations.

Do you use a Stop Loss in your trading? And what is your strategy for determining the ideal ratio? Let's learn from each other's experiences!