STOP-LOSS. What is it?🤔
In crypto trading, a stop-loss order is a tool used by traders to limit their losses when a trade goes against their prediction. 📉
A stop-loss order is usually placed at a specified price level below the current market price of a crypto that an investor holds. This is meant to protect the investor in case the price drops suddenly, triggering the stop-loss order and automatically selling (or buying) the asset at a previously set price.
For example, if an investor buys BTC at $50,000 and sets a stop-loss order at $45,000, the order will automatically sell BTC if the price drops to that level, thereby limiting the losses that could be incurred if the price continues to fall.
In this way, stop-loss orders are a popular risk management tool for crypto traders!
