zagovaledris
Amante del cripto trading, de los viajes y la medicina
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What is a Stop Loss and why can it save you from losing money
Trading is not just about seeking profits.
Most of the success comes from avoiding large losses, and for that, there is a tool that every beginner should master from day one: the Stop Loss.
š¹ What is a Stop Loss?
A stop loss is an automatic order that executes a sale when the price drops to a point that you define.
In other words:
š it is a loss limit that you set to protect your money.
If the market suddenly drops or moves against you, the stop loss activates on its own, even if you are not connected.
š¹ Why is it so important?
Because in trading, it is not about always winning.
It is about not losing so much when you make a mistake.
Most beginners lose money for these reasons:
They donāt know when to exit.
They cling to trades that are already going bad.
They wait for it to ārecoverā (and sometimes it doesnāt).
They donāt have a clear loss limit.
A stop loss eliminates that problem.
It protects you from emotions, impulses, and sudden drops.
š¹ Simple example to understand it
Letās say you buy a coin for 100 dollars.
You decide that if it drops to 95 dollars, you no longer want to stay in the trade.
Then you set a Stop Loss at 95.
If the price falls to that level:
ā the coin sells automatically
ā you control the loss
ā you avoid a small drop turning into a catastrophe
Without a stop loss, you could watch the price drop from 100 ā 80 ā 60ā¦ and then the emotional and financial blow is greater.
š¹ How to choose your stop loss?
Here come concepts of technical analysis, but for beginners, there are 2 simple methods:
1. Behind a significant support
If the support breaks, the price usually falls more.
2. Fixed percentage of risk
Example:
āI will risk a maximum of 3ā5% per trade.ā
This gives you discipline and control.
š¹ The most common mistake: Never using it
Many new traders believe they will ācontrol it manually.ā
Trading is not just about seeking profits.
Most of the success comes from avoiding large losses, and for that, there is a tool that every beginner should master from day one: the Stop Loss.
š¹ What is a Stop Loss?
A stop loss is an automatic order that executes a sale when the price drops to a point that you define.
In other words:
š it is a loss limit that you set to protect your money.
If the market suddenly drops or moves against you, the stop loss activates on its own, even if you are not connected.
š¹ Why is it so important?
Because in trading, it is not about always winning.
It is about not losing so much when you make a mistake.
Most beginners lose money for these reasons:
They donāt know when to exit.
They cling to trades that are already going bad.
They wait for it to ārecoverā (and sometimes it doesnāt).
They donāt have a clear loss limit.
A stop loss eliminates that problem.
It protects you from emotions, impulses, and sudden drops.
š¹ Simple example to understand it
Letās say you buy a coin for 100 dollars.
You decide that if it drops to 95 dollars, you no longer want to stay in the trade.
Then you set a Stop Loss at 95.
If the price falls to that level:
ā the coin sells automatically
ā you control the loss
ā you avoid a small drop turning into a catastrophe
Without a stop loss, you could watch the price drop from 100 ā 80 ā 60ā¦ and then the emotional and financial blow is greater.
š¹ How to choose your stop loss?
Here come concepts of technical analysis, but for beginners, there are 2 simple methods:
1. Behind a significant support
If the support breaks, the price usually falls more.
2. Fixed percentage of risk
Example:
āI will risk a maximum of 3ā5% per trade.ā
This gives you discipline and control.
š¹ The most common mistake: Never using it
Many new traders believe they will ācontrol it manually.ā
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Basic trading knowledge that any beginner should understand before making their first
š„Entering the world of trading may seem exciting, but it is also one of the fastest ways to lose money if you start without fundamentals.š„š„
Most serious mistakes come from not understanding the basics, so here is a clear and simple review that will help you make smarter decisions from day one.
1. The difference between Spot and Leveraged Trading
This is the first concept you must master because it determines how risky your path will be.
Most serious mistakes come from not understanding the basics, so here is a clear and simple review that will help you make smarter decisions from day one.
1. The difference between Spot and Leveraged Trading
This is the first concept you must master because it determines how risky your path will be.
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The safest way to start in crypto
Entering the crypto world doesn't have to be complicated or risky.
In fact, the biggest risk usually comes from not knowing what you're doing.
Most beginners lose money because:
They buy out of emotion,
They sell out of fear,
They follow random recommendations,
They enter without a plan.
Here is a simple, clear, and proven guide to start in crypto without risking too much and avoiding common mistakes.
1. Only invest money that you can keep for 6ā12 months
Crypto moves fast: it can go up 10% in a dayā¦ and also drop 15% without warning.
In fact, the biggest risk usually comes from not knowing what you're doing.
Most beginners lose money because:
They buy out of emotion,
They sell out of fear,
They follow random recommendations,
They enter without a plan.
Here is a simple, clear, and proven guide to start in crypto without risking too much and avoiding common mistakes.
1. Only invest money that you can keep for 6ā12 months
Crypto moves fast: it can go up 10% in a dayā¦ and also drop 15% without warning.
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What is Bitcoin? Explained in 1 minute
It is the first decentralized digital currency in the world.
It does not belong to any government, bank, or company. It works thanks to thousands of computers around the planet that validate all transactions.
Key points to understand:
Bitcoin is digital money that you can send without intermediaries.
It is limited to 21 million coins, which is why many consider it 'digital gold.'
No government prints it, so it cannot 'devalue' due to excess money.
To use it, you only need a digital wallet.
It does not belong to any government, bank, or company. It works thanks to thousands of computers around the planet that validate all transactions.
Key points to understand:
Bitcoin is digital money that you can send without intermediaries.
It is limited to 21 million coins, which is why many consider it 'digital gold.'
No government prints it, so it cannot 'devalue' due to excess money.
To use it, you only need a digital wallet.
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