The use of stop loss is one of the important and distinctive things in the world of crypto, or even any global market, so nothing can be successful without mastering this option and how it can be used correctly. Unfortunately, many people do not realize or know how to use stop loss professionally; they hear about it, yes, but they do not excel in using it in a distinguished manner. Therefore, I will write to you the most important matters for using this matter and how it can help you maintain your trades while also protecting your capital or even protecting profits. For this reason, this post is a gift for the followers who often ask how I can use stop loss, and whether the use of this matter is always below the entry point in this market. I will answer many inquiries in this regard and address the most important pillar of stop loss.
In the beginning, you must know that entering this market should be according to calculated equations and that it should not be a hasty or random entry. This market does not forgive people who act ignorantly and who do not manage their accounts or trades according to official security standards. Therefore, one of the most important things at the beginning is to define your goal and what method you want to work with in this market. In my view, whether you are an investor or a trader, you should maintain the main security for your trades and a smart plan for capital management, and define the time frame for entering or exiting this market.
In my opinion, Abu Karam, in the beginning, should not enter a trade without a signal or a smart opportunity that at least achieves a profit or a specific target. You must determine the time frame that you need to be in the market or the trade. You also need to maintain your psychology and keep your discipline, calm, and not fear or even withdraw early. The market does not tolerate the weak and places you in guaranteed losses if you show the market that you are a weak person. Nevertheless, there are many options to protect your trade from losses. Some people use a financial reinforcement scenario every time the market drops, which is a successful plan but not always in bear markets that can drag the entire portfolio down. This is why the stop loss option was created, which significantly helps you maintain your account and improve your mood and psychology, keeping you at least away from the fear and anxiety that a trade situation puts you in, especially if you are a trader or an investor with a large capital. Therefore, I, Abu Karam, will give you some questions and answers about the stop loss.
Does the stop loss always protect your money?
In my opinion, it protects you from a real disaster, but it doesn't guarantee that it alone will protect your money. The nice thing about it is that it can prevent a trade from affecting you or destroying your account and funds.
Where should the stop loss be placed correctly?
In my opinion, the stop loss should be placed somewhat far from the entry point, especially if you are comfortable with this point or have been successful with it. Therefore, you must maintain this aspect, meaning an entry that is not random while also having a stop loss that is far enough so that the price does not drop and hit the stop loss easily. This means also giving the price space to move freely.
Is there a specific and fixed place for the stop loss or is it movable?
The original idea is to set a fixed stop loss so that it doesn't affect your psychology. Thus, you must leave room for the price to move from the beginning, and even then, if you see that you misjudged the stop loss location, you can adjust it without affecting your main plan, which is to protect your capital.
Is the stop loss always aimed at protecting the trade from loss and the account from collapse?
Of course not, because the stop loss can also protect a quarter from loss. If you enter a trade and the price rises with you, immediately raise the stop loss to maintain the profit. This is one of the most important matters, so I strongly prefer the trailing stop loss to protect the profit while maintaining some distance for movement and fluctuations.
Should I set the stop loss just when I enter the trade?
Definitely, you should set a stop loss and determine the place it should be in, and it should be suitable for your strategy. You will discover later that you are making real profits through entering the trade while maintaining your resilience. In my opinion, rely on the stop-loss rule that is profitable.
How do I set the stop loss on Binance
Go to trading, select instant, and then choose the currency from above. Of course, choose what you want, and I chose Bitcoin. Then click on the sell button next to the buy button and directly below it choose OCO or a request to cancel the other. Notice this image I took from my account.
Now we must adjust the options and settings precisely to activate the stop loss option professionally and intelligently. I placed the necessary settings in the other image.
In this image, I assumed I have $BTC and my goal from the trade is to sell when Bitcoin reaches 126000 >> and my entry point was 89000.
After adjusting the options, click on sell. The automated system in Binance understands that when it reaches 126000, it will close the trade with a direct profit, and if the indicator reverses negatively from your entry point, it will sell automatically when it reaches 87000. We set the number 87200 above because sometimes the speed of the indicator or the drop doesn't allow it to sell. So, it's like having a stop loss in two phases: activation and selling, and they should be a bit apart. The important thing is that from now on, there is no need to monitor every minute; you are surely safe, and God willing, you can head to dinner without fear or anxiety from monitoring the movement of the indicator and the price that stresses the psyche.
Therefore, my dear ones, I want to say something... The stop loss is the most important option to protect your account from destruction and the most important condition for trading. Mastering it means that you are quickly heading towards profit.
It must be said that the stop loss option is undoubtedly the option that allows you to be in control of the market and not the market controlling you. You are the one controlling the trade and not the one being controlled.
Hey folks, how many times have circumstances or wars or economic decisions quickly and overwhelmingly affected cryptocurrencies? With this option available on Binance and it's easy, you can truly protect your capital.
Brothers, I invite you now to enter $XRP a special currency close to my heart. Enter it and try to set the stop loss as you learned, and relax. Try to post a picture in the comment so I can tell you Bravo.
By the way, the XRP currency is one of the global currencies and dear to my heart as the topic of speculation or even investing in it is beautiful.
In summary, the stop loss protects your balance if you are a trader, and if you are an investor, it protects you from incurring heavy losses, especially if you are involved with large amounts.
Note: The stop loss can have certain metrics, and some people place it slightly below support areas, but I simplified this topic to help the largest number of traders preserve their balance from loss and understand the concept of stop loss in general.
I wrote this article myself for you, and these images are from my phone to all of Abu Karam's followers. Please don't hesitate to leave me a nice comment so I can give you lessons in a simplified and easy manner and in this style.
