Topic: Trading Lesson: Stop loss Strategies (Read 741 times)

One of the reason why traders loses their money after using this feature, especially inside volatile market, stop-loss is a good tool
but also can be a reason why you will lose your investments.
One mistake with your entry/exit positions  will burned everything, you needed to  check your position before placing your stop-loss position.
Remember that whales are just around the corner waiting for the big hit that will shake every weak holders inside the market.
Stop-loss is a continuous learning process, from time to time you will learned and adjust until you tuned the proper blend between
your traditional strategy and your stop-loss system.

Ok. I choose my stocks very wisely
and I don`t invest more than I`m comfortable with.
I don`t invest money in projects which I don`t understand.
And normally I only invest when the stock is on the bottom,
very rare in the middle and never at it`s peak.

Maybe you just invest too much, or overvalue money.
If you lose money you will be still alive.  

Well. in this case your perspective will different with daily trader perspective. As daily trader, i admit, i still don't have big "guts' like pure investor "guts".
But since last month, i did trying to have that "guts". Starting with some undervalued coins and some few lunch bucks. But, still, everyday i check their price. I think this daily habits trader still attached.
Btw, wish me luck yeah.

Well, I`m a longterm investor and do
high diversification (30-50 stocks).
I don`t care about 80%
ups and downs by pennystocks/coins.

And maybe some brokers looking for their clients stop-loss,
so they can easy bet against them.

And there are many other reasons no to use stop-loss.

But I´m not here to convince you. Just my trading-strategy.

https://www.timothysykes.com/blog/stop-loss-orders/

Following your logic, what about if price still going down like happened in march 2020? And there's no pullback 20-30% like you said.
1. Without stop-loss, If prices goes down without pullback, there a possibilities that your asset will be undervalue from your previous buy (in spot). Or losing all your capital (Margin Call, Liquidated) in derivative markets. +> Mentioned by tvplus
2. With stop-loss. You can minimize your loss.

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Stop Loss will useless if you don't have :
1. Trading Knowledge
2. Strategies and plan

Stop-Loss can be dangerous, too.
Because in some cases it can lead to a way bigger loss
than with a "mental" stop loss. Because by a fast crash
you sell unlimited to a very cheap price.
And after a big crash a stock comes often
back 20% to 30% percent very fast after you get stopped out.

I don`t use stop loss, escpecially on very volatile invests.
I watch the charts 1 or 2 times per day.
Works fine for me.

Big investors can crash a stock to
shake stop-loss-traders out.

But I´m a longterm investor.
I don`t care about 80%
up and downs in volatile markets.

This will be a "tight" stop loss. Very useful if :
1. if applied in futures and/or derivatives market
2. Using big leverage (above x20)
3. For coins with high volatility (especially for coins above 2018 which price usually below $30)

This tight stop will be work perfectly especially for scalper (trader that using TF below 1H).

Yes, it is important to use stop loss because it is too risky to go with one flow, as if we do that then we will only end up losing and wasting time. I work with proper strategy to help myself with gaining well.

You can trade on the spot market without a stop loss. In this case, you risk losing part of your Deposit. But if you trade on the margin or futures market without a stop loss, you risk losing your Deposit completely. This understanding came from my own experience when I first started trying to trade.

I can update the thread and add this strategy, that stop loss level is called stop loss below the last trading candle where you will only cut your position whenever the price goes below the candle before the current candle. For example we are using 30 minutes chart and the current candle is at $64 per each and the candle before the current candle close at $62. Meaning our stop loss is at, $62 where if the price reached it; we will definitely close our position without thinking twice.

Great thread, definitely something that a lot of newbies need to see since they often forget or don't know they need to put a stop loss in place.

I personally set my stop loss at below the point at which the cryptocurrency was last trading horizontally.

This helps me avoid getting stopped out by pump and dumpers or scam wicks.

Have learned to move-on whenever I find myself into any form of shits while carrying out my trade. Personally, I don't apply stop loss because of my personal experience, sometimes ago, I bought some coins #ARPA in Binance and went to trade them, I made some good profits and wanted to make more,  but the market crumbled;  but was Left without any options, a little holdups save my ass from loss to huge gains. In the trade I made roughly 100% profit with ARPACHAIN(let learn to apply risk while trade)

Youre right but fir traders to make a good outcome aside have the require experience and learning good capital is also needed.

Thats because theres different in you learning and you developing yourself intellectually. Meanwhile, reading article/books is just like you going to school and you cant be successful only with what youre taught in school you also need to think outside the box.

Trader also need to know their limit cause trading on different platform require good knowledge in managing each portfolios and time.

Trading is one of the hardest things we could do if we want to earn extra money but still, it takes time to learn and gain a lot of experience to make a good outcome to have a market income some of the people read a lot of articles, books and news about the trading but still they lose a lot because of the experience some of them does not have enough experience and some of them are not fully prepared and does not find the best trading platform to them and this may give a lot of confuse to them so they make a different investment on the different platform and this is too much hassle and expensive.

OP does give a good content right here which can help a lot of people into the world of trading I hope someone gives a good feedback if they use this and learn about it.

If we choose the wrong coin, it'll be difficult to get out of the losses because it will go down below the price we bought. And if we sell it, we will get the losses, which will be the risk we need to get. The volatility will always happen in many coins, but we don't need to choose the coin that doesn't have a movement because it is hard to buy low and sell high. It can be worth to buy the coin in the top coins because those coins have a movement so we can try to make a profit.

There is a chance to profit from any top coin, but we need to analyze one by one of that coin so we can have the chance to buy low and sell high. It will difficult if we can not analyze with the right because we can get the wrong coins.

Not all of coins are the same and it is important to understand the DNA of the cryptocurrency that you want to trade. Are you aware about "history repeat itself"? It is true that the term history repeat itself is happening in trading and it is the reason why we should identify what kind if DNA has the charts. Picking a specific coin is a skill and it is not easy because sometimes you need a screener to do it. I do not pick a coin that have low market capitalization because most of them are shitcoins and even though you have proper risk management there, for sure you will still incur losses if you will trade a shitcoin.

Moreover, all the coins are same from the perspective view of technical analysis. It means even you will be choosing a wrong coin, you can manage to get out of it without losing much or without losing anything. I mean you need to be versatile in your skills required for perfect trading. In my experience, as long as a coin is listed on exchange, it can be worth to try trading it to make some profits. Only for long-term holding, you must need to check all the fundamentals of that coin so that you will not get into any shitcoins.

I do not mean here that you can make profits from any coin; but I mean even you get with a pump and dump coin but if you're having technical support then you can manage to make profits from it regardless of that coin is not worth anything and could be classified as shit/wrong coin.

It is why we need to prepare ourselves before trading by learning many lessons related to treading. We can not blame the coins because we don't know which coins that will be the way for us to make a profit. Only with learning about how to analyze the coin, we will find the coin to trade. And if somehow, we can not find that coin, we need to break for a while and don't trade because that can make us get lose by choosing the wrong coin.

No, we can do something for them and that is the core reason whey we are having this community and we are all contributing to this types of discussions out of our energy and time. I mean will do our level best for enlightening them about the important aspects of trading and the rest is up to individual's perception and preferences. When we keep having this kind of trading lessons that will definitely help one or other trader who is really struggling due to lack of knowledge.

I am sure that when traders are taking time to find useful discussions here and going through different forum member's sharing about their experiences on trading and ideas about different strategies then that will be more helpful on building them into pro grade like trader over the time. I have been doing that for years and I am a small level trader with consistent profit making records.

@OP
Thanks a lot for sharing this trading lesson on stoploss strategies. Very useful for all active traders to make them more efficient even they are familiar or making use of stoploss for years. Honestly I look for more such trading lessons on different trading aspects in coming days. Good luck mate!

That is right, they keep blaming the coins that they bought whenever they lose. They do not know that risk management is the problem why they keep losing in the market. They are playing the role of the victim which is they keep blaming, they cannot become a profitable trader if they will not use any risk management.


They deserve whenever they lose big amount of money without having a stop loss. I think losing big amount of money will driven them to say that stop loss are really important to use and we should always have give care about it.

The need of understnading this function is really important especially if you are really into this business, you need to learn and start using this features.


The bad sides of traders, always looking for someone to point finger to blamed, instead, enhance your knowledge and adjust from everything.


Though there are lots of things to also need to considered before using this function, but it's really applicable and useful.


As they seen good advantages when you have this system while trading from any exchange.

Yes, it is really pathetic that many people do not understand the importance of having risk management in their trading. I have seen many people are sharing like they never need to use stoploss because they are ready to hold. But, in my view that cannot be a right way of trading because time is very important factor in trading and when you're ignoring it then definitely you are missing the big opportunities for the same capital amount.

I'm not sure everyone will be having enough money to get locked in one opportunity and making use of other money in some other opportunity. If you want to make use of your money in more efficient way then you should go for making use of stoploss because it will definitely save a lot of your time and other required efforts.

Honestly trading is not suitable for the traders who are ignoring the basics of risk management. We cannot do anything about such people who are ignoring to make use of stoploss strategy and then leaving off crypto trading completely. In some sense it seems they deserve it .

Very useful topic, because many people when trading do not use the stop loss strategy. Finally suffered a big loss
and say trading is not for everyone, which is worse will blame coins that have been purchased. With the learning
stop-loss feature this has finally opened everyone's mind. And finally many people now use the stop-loss feature
when trading.

Thank you guys for making this thread so informational! I will update this thread with new lesson which is "how to use trailing stop". Preserving our profits will be our focus, it is an advanced strategy but for sure all of you will get it easily.

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I'm happy to see that there are now a lot of traders like you who are willing to use stop loss strategy and I'm grateful that all of you treat it as important when it comes to trading. Stop loss is part of risk management. We cannot achieve financial freedom if we do not want to learn it and use it when we do trading.

Usually all emotions related things will lead you to meet stop-loss lol ; To avoid this, like you mentioned long term should be the simple solutions. Yes, I am a long term trader hence I never needed stop-loss functionality in my trading.

If making use of stop-loss is too hard and requires all skills then we can simply skip it by opting the positions to hold for longer duration. I mean you do not need to square off your positions at stop loss; you may leave it open for long term so that market will recover. It is possible only when we trade at spot markets.


This is how whales do manipulate the markets to eat up your stop-loss levels. Sudden spikes are usually the manipulations to hit the stop-loss and you get you away.


But your protecting way should not be in a way to reduce your capital over the time. I mean when you TA is not good and you keep hitting SL more frequently then making use of SL is not at all has any sense. Whenever I face a SL, then I will go working on finding what was wrong with my SL. So, that my next trade will not be the repeation of same mistake; this way I will recover my SL losses with next trade itself at most of the times.

You can lose more if you do not have stop loss, the OP explained it very well so I'm sure that SL works very well and it is important to learn. When we do trading, protecting our capital is our main goal and our second priority should be gaining money. It is the main reason why we should focus on having SL in every trade. Think about it, what if you do not have stop loss for sure you will incur huge more losses.

Stop loss is good to use but not in all cases, if you are the type who do trade on future trading you will know that sometimes its better not to use stop loss. Stop loss hunting is real, and you can loose all your capital if you keep entering after getting stopped. I've seen a case mostly whereby exchange will hunt for stop loss and pump it up after most of the SL got triggered. I seldomly use it, most especially when trading on futures

Stop Loss would be basically the last hope in trading, if you get it activated that means your trade is officially over and you are not going to get anything profitable on that one. Sure it is a good method that you should use in order to not lose even more money, but that is just the "not horrible, just bad" part of the situation, it still is not a good thing.

I agree that sometimes you should prepare for bad stuff and stop loss is one of them but I decline that it is the only way. If you do not get in with all of your money, you could still find another method. For example you have 1000 dollars that you want to buy bitcoins with, buy 500 dollars worth and keep the other 500, the more the price falls the more you buy, is it 8k? buy another 100 dollars, is it 7k? buy another, by the time your money is over that is 5k and you will have a lower average.

There are a lot of newbies that are not using any strategies on trading. They did not want to stop their loss because they believe that some other day, the coin will just be pumped up. They do not realize how much they did lost already. Plus it is not guaranteed that the coin will just go up again later. Some of them do not realize that and just sticking to be a believer to the coin.
Though I believe they will realize that and learn from it sooner or later. Cutting loss is very essential on trading and that must be realized by every trader.

The explanation is good and it is really easy to understand but I'm sure that it is not easy to master, I think the OP proved that the debate over stop loss are already finished because there are still a lot of self proclaimed professional traders who are not using any kind of stop loss strategies where they say that stop losses are not important. I'm sure that if they read this, their perspective to stop loss will quickly change.

For sure I will not survive in the market for a long period of time if I didn't learn to use it. I experienced to loss huge money when I still do not aware on what it is. The reason why I adapt it in my trading system is simply because for me to not experience again huge losses like before.

Usually, other market participants make money just on stop losses. I mean scalpers and day traders. A huge number of participants put stop-losses there, where you say - under the support line. But the market is not ideal and very often your stop-losses can knock out and then market moves in your direction, but without you.

For me I will rely on the number 3 to determine the stop loss (Percentage based.), I think that setting the stop loss on a percentage of the price will be the best, I did not like the way to determine the loss by time because if I set the stop loss after 5 days of the deal it will be sold at Low and the price may go up after that.
Anyway, thank you. You did a great job, and a very good explanation supported with pictures.

Thank you very much for sharing your stop loss for many members here, actually speaking where determining the stop loss is very difficult. You have helped me expand my daily trading experience. Besides, I would like to talk more about how to set a stoploss so as not to be scanned by the shark. For sensitive periods, you should only use the x10 lever and set the stoploss level to about 100 pips higher than the pivot point. That is the experience that I have learned after 3 years of trading in this crypto market. Hope it helps the new traders here.

I think you misunderstood the concept of stop loss, the reason why we are putting it is not because we are expecting to lose; it is just a strategy wherein if our bias went wrong or the market turned tide against us then we can prevent huge losses using stop loss. Traders have set of rules after all and I'm now well discipline, I do not regret whenever I cut my trades and when its price start to recover again. I have different plans in different scenarios so basically my execution is base on what I planned.

Honestly after getting into long term holding based trading in this cryptocurrency space, I literally forget to make use of stop-loss things in my trading. Thanks for providing a chance to walk through the old memories; even I am familiar with what is stop-loss and how to use it in trading, your topic provided another chance to evaluate whether I am doing right with my trading or not. For example, I did not go for booking profits when it hit $19k levels but I at least should have exit by the times of $15k and then should have bought back when prices were trading below $4k. I mean even in long term trading, if I went for making use of stop-loss then I might have got chances to multiply my bitcoin stash into at least 3 times.

Thank you guys, for contributing to this community on what exactly traders here need. If someone works on indexing these kind of good topics, that would be really helpful for many traders for sure.

I actually saw yours and it is a nice one and thanks for bumping it so more people can see the thread.

I have a little problem with stop-loss strategy and that is once you set stop loss you are basically going to prevent loss, right but you are also working against yourself because you are expecting the trade to go wrong and sell off the asset to manage loss. But, think of a scenario where you sold off the assets and then the price later started to grow again then you regret because what could have been a neutral or positive trade was forced to be a negative trade because you chose to stop your loss. This is quite similar with panic selling when bitcoins go down. Right?

OP, I really appreciate your thread. I am really a fan of using stop-loss and this should be a must for all traders, even they are just starting or learning.
I also created a thread that just like this last year of August, if you mind, you can also visit my thread, they are almost the same concept, showing the importance of using a stop loss.
My thread before: One of the Best Weapons in Trading

This topic really helped me to find out more details about the stop-loss strategy, and I agreed without using stop-loss in the end
the profits we can get and the capital we have is likely to run out. Especially for newbies I suggest to understand how to use stop-loss
properly. Without the right stop-loss strategy that we use will not run optimally.

For technical strategies Based on almost all traders understand that placing a stop-loss is usually below the support price. Then related
to time based strategies I have never use it, apparently after reading the explanation in the opening post, i realize this strategy is very
important. So that we can switch to other coins if the target is selling we are not reached within the time we set. For the third strategy
I have a different opinion regarding percentage based, in my opinion minus 8% is too big. I choose if the coin drops to minus 5% I will
immediately do cutloss.

Having a stop-loss order in place is very helpful should the trade go in the opposite direction. This way, you can decide how much loss you can take before closing the trade. Stop loss comes in very handy especially when there's high volatility in the market.  For instance: Yesterday,  Binance announced that they'll be delisting 3 assets (ARN, LUN and FUEL). Now, These assets had pumped in recent time so some traders might still have opened trades for these markets. After the announcement , they all plunged about - 30%. This happened in a very short amount of time as people panicked sold. Having a stop loss in a scenario like this would limit the losses especially if you were not active during the time of the announcement.

A similar case is that of Bitcoin when it dropped over 40% in late February- early March. The benefits of stop loss cannot be overemphasized. It's an essential ingredient in every trader's toolbox. Be careful to not put it too tight though else you might get stopped and then the market continues in the direction you expected it to go just not with your order included in the ride.

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Kudos to OP on the read. Its packed with good information. Thumbs up.

What is setting the order accurately? You mean placing limit-order? Yes, traders must know the differences between market order and limit-order. But, most exchanges are now having different UI to let their traders to place orders what they actually need to do and preventing accidental wrong type of orders. For example, for market orders, you cannot set price level but only for setting size, you are allowed to. This way anyone can easily work with stop-loss orders with limit type of order placement, I guess


Wow, that is really awesome that you people have contributed for traders of this community in more effective way as well. Thanks a lot for sharing this link, I find it is really a worth to go through so that I could make my trading knowledge better with respect to stoploss handling in my cryptocurrency trading.

Op you well explained the strategies. It's really a useful strategy for the professional trader. But who has not much knowledge about it and can not set the order accurately should not use it. So always try to learn first and use the strategy later.

I have also created a trade-in long ago about stop loss. you guys may take a look there if you have much time : [GUIDE] How to place stop-loss sell order.

I think stop loss is important and needed in all types of trade if you want to apply it. The difference is that the range for it could be smaller or longer. Or the expected time might be different. For instant, a long time trader also can activate the stop loss to avoid losing more than expected.

Engaging stoploss in the trading is important for in two cases:
1.You do not have plan to hold for long-term.
2. The asset that you are trading is not suitable for holding.

For the case of bitcoin trading against fiats, I guess we do not need any stoploss if you are buying it only with the money which is surplus after your all expenses for any given time frame. I mean this is what experts here are always emphasizing through "buy at every dips".

So when stoploss is more important and when we should strictly following the habit of using stoploss in our trading?

When you're having plans to trade again and again which will get you to cover your losses which might have occurred due to hitting stoploss in the previous trades, then making use of stoploss is highly recommended.

If your asset is good for long term holding (only for the case like bitcoin trading) then you can avoid exiting at stoploss.

Well that's part of your strategy and you must always have this or less, you can reach the bottom of your losses and it will be hard for you to recover. I always use TA for my target price and stop loss, and my strategy is so simple I buy when the price is on the support level and do sell when it reach the top again.

Trading is stressful, and it will become more stressful seeing your portfolio bleeding so better to have the stop loss strategy which can prevent you from losing more. If you do trade without it, then you must depend on your luck which is too risky.

I like the time base part. Honestly, the strategy have been using is setting stop loss not to loss.
Like for example. When I buy at 9350 so I watch the price to get to above 9420 and I set my stop loss to 9390. This have been working for me. But I think your strategy is safer incase there is a huge dump.
Your time base strategy brings a lot to my notice. That's good.

stop-loss could come in handy and save you from bigger losses in some occasions but not most. it may work a lot more in bitcoin too but when it comes to altcoins it becomes a lot harder to use and less effective specially the types that rely on analysis such as the Technical based ones. the problem with altcoins is that they are mainly pump and dumping and during that process it is impossible to predict their movements and make good decisions. you'll end up hitting the stop loss multiple times during the time when the manipulators are trying to get the pump started or when the initial phase of the pump finishes and the next phase is to start.

I'm very thankful that there are still people believing on stop loss because there are some people telling that using stop-loss is useless.
Newbies should really learn this first when they want to start trading, cryptocurrency, or non-crypto currency. This is a MUST for me when we do trading.
Risk management is important in trading and we can achieve it with the help of course of using stop-loss.

What you just say is definitely part of the percentage based stop loss strategy, It is called VAR or the Value at risk. Why we should use it? In order for us to know how much capital are we going to put in a trade and also to know how much risks are we going to take. The ideal risk in every trade is 1%. The formula to get the bar is you going to divide the percentage stop loss that you prefer to your 1% capital. For example if you have $100,000 as a capital and your plan is to have cut loss whenever the price reached -3%. You will basically get the 1% of the 100,000 which is 1,000 then you are going to divide the 3% to $1000 because it is the 1% of $100,000 then you will get an answer of $33,333. Which means that you can only put maximum of $33,333 in one trader if you plan to have stop loss which is at -3%

Giving a very important lesson Determining the stop loss in trading is very important, those who do not use stop loss will suffer today or tomorrow, I use Technical based stop loss. If you do not trade without stop loss, then it is expected that the balance will not be zero.

Stop-loss Strategies is an essential trading part to reduce your loss and save your asset on a sudden market collapsed. Every skilled trader uses it based on market analysis and experience estimates. Not every market analysis of the trading is accurate and this strategy helps traders to make a decision. I use stop- loss strategy based on market analysis, support resistance, and the amount of damage to my assets is based on what I can accept.

I believe setting stop-losses is just one side of the story. After determining your stop-loss, a pro trader should define how much loss he's willing to take. For example, I only want to lose $100 per open position out of my $10,000 capital. The size of the position should result in a $100 loss once stop loss is triggered.

I will be looking forward to that as well. I'm quite familiar with those types of orders already, but a review wouldn't hurt as well. Some techniques even are entirely new, like what I said in my previous post. But I like the trailing stops too because I could adjust it while I trail the market with profits and possibly gain more if the market gives it. That's the goal that everyone wants, preserving the profit, right?

Yeah it is a semi advanced lesson but I can post again another lesson about trailing stops. So I will give an idea what is trailing stops. In a nut shell, stop loss are using to protect your capital while trailing stops is to preserve and protect your gains in market. So basically trailing stops is using whenever you have now gains in the market. Why we should use this? It is simply because there are times that we have profit but our biased turned against us where our profit is becoming losses. So for simple terms, trailing stop is to lock in our profits and to make sure that we will preserve our profit.

I am using trailing-stop-loss which is derived from technical analysis and percentage based.
When your entry and exit points are provided by technical analysis then your stop-loss also should be derived from same technical analysis. So, there is no point of using time based stop-loss unless otherwise, you do not want to mess up against news hour then you may exit your positions based on clock. Still, your technical analysis must have guided you on both positive and negative outcome.

When your stop-loss is too far away and you do not want to wait more with the expectation of market to bounce back then you can go for percentage basis stop-loss if you're planning to recover your losses in same percentage levels. Percentage is here just the count to make use while recovering with the help of future trades.

Thank you for the trading lesson about stop loss. I mostly use the technical-based, it's the most common stop loss strategy and even the stock market traders are using it.

Cut loss is a strategy to avoid further losses.

I had to admit that this is a well-detailed explanation about the strategies of stop losses. This is definitely helpful for newbies, beginners and average traders who are struggling to profit in trading because of not learning so much.

There are so much things to learn here in cryptocurrency trading, and I would definitely bookmark this thread of yours man. Despite that there are no guarantees in cryptocurrency trading due to the unpredictability of the market nowadays, this would really improve our trading skills.

Thanks for this detailed explanation man. Really appreciated it.

I like how you made the use cases on how Stop Loss could be used and utilized. The Time-based one is the one I'm not that familiar. I haven't thought about using time as a factor in trading. I always focus on the price and how much it would go in one direction. I don't think it's going to be quite useful on my strategy, but it's nice knowing that type. Maybe we could incorporate it in our bot, Gunbot. Time-based strategies, but I doubt it's going to occur most of the time.

Trailing stop-limit, I think, could be considered with this advanced application, right?

And that was happen to me often times because my stop loss always triggered and hit. But honestly, I didn't know there is a good way on what price will we put stop loss. I just set on that below resistance level price and sometimes above it when entered long position. Though it will lessen our huge losses, the market is so tricky but it really be a great help not to be liquidated the whole fund.

I know it's something obvious for some users but it's good to add that it's not free. When a stop-loss order is executed, so a market order, it incurs taker fees.
You forgot to mention the Negative offset from the current market price, which is similar to percentage-based, for those lazy with percentages.

There are also more advanced Stop loss limit orders

Is nice to use stop loss but sometimes the purpose can be defeated when you consistently hit it. It takes your profit and capital off. Stop loss is not really a strategy but a way to minimize losses if you have a strategy 

Hello guys! I just want to give you an idea and concepts about how to set stop loss or cut loss. I created this thread because I observed that most of the traders here in the forum are just buying certain cryptocurrency without set of rules and also without risk management. Let’s define first what is cut loss or stop loss, cut loss is simply a strategy or concept that you can use in order to protect your capital. I’m sure that there are some of you that have these thoughts in your head like “why do I even bother to learn it?”. Remember this!!! Without a cut loss strategy in every trade, for sure that your portfolio will be wipeout immediately. This is the example if you will not put stop loss or if you will not consider any risk management.

This chart is the daily chart of Litecoin. It created double top pattern last February and imagined that you buy in that price without a cut loss strategy. When it breakdown, it created lower lows and lower highs and it is simply sign of downtrend. This is the reason why stop loss should be part of our rules whenever we enter in a specific trade.




These are the 3 Stop loss strategies


1.   Technical based. This stop loss strategy is a concept where you rely on price action, price structure, oscillator or indicators when setting a stop loss. The most common stop loss is placing below the support level Let me give you an example.

Exhibit A
This chart is hourly chart (1h) of BTC/USD. As you can see that the price is ranging between the support level at $9350 and $9476. If you want to enter through long position in that trade, the ideal stop there is at below support level which is at $9350. Remember that it requires discipline because a real trader have a set of rules that he/she should follow. Whenever the price reached that level, make sure that you will sell your positions in order for you to not suffer major losses.



Exhibit B
This chart is hourly chart (1h) of BTC/USD. Unlike the other one, this cut loss strategy is relying on the indicator that I use which is 100 MA. Whenever the price reached this area, I immediately sell all of my positions in order to protect my capital.





2.   Time based. This stop loss strategy is a concept where you rely on time or date. For example, you have a time base stop loss strategy and you set it within 5 days, when the price never reaches your target profit within 5 days then you will sell your position. This kind of strategy is for experiential trader.


Exhibit A

This chart is the daily chart of BTC/USD. For example, you bought BTC in its current level which is at $9393 and your target profit is at its current resistance level at $10470 and you have a time base stop within 5 days. You will only close your position if the price reached it within 5 days or if the price doesn’t reach the target profit in the given time period.



3.   Percentage based. This stop loss strategy is a concept where you rely on percentage of a certain cryptocurrency. According to some experts in trading, the ideal percentage stop is at -8%. It only means that if the cryptocurrency that you buy reached -8%, you should immediately sell it.

Exhibit A.

This chart is the daily chart of ETH/USD. For example, you bought ETH at its current level which is at $244 per each, the ideal stop loss in percentage is when the price reached the -8% which is at $227 per each.




Thank you so much for everyone, I hope you learn concepts and ideas from this. Please use it whenever you trade in order for you to protect your capital and also to have consistent earning in the market.