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Have you ever experienced doing trade and ended it up by #HODLING? (You bought a coin and waiting to pump, but unfortunately it dumps, and decided to wait for it until it pumps)
Have you ever experienced liquidated on Margin Trading Exchanges? (Huge red/green wick candle?
)
I want to share my weapon against that situation. Meet, STOP-LOSS.
What is Stop-loss?
Stop-loss is accepting your loss on the trade or you are minimizing your loss or cutting loss before getting rekt in ahead of time.
Why we need to use stop-loss?
Example:
As you can see the example above, you minimize your loss around 5%, because if you didn't exit on your trade or accepted your loss, you can lose a huge amount in the future if the price continues to dump.
Onto your next trade! Always remember that there will be always a good setup and sometimes much better if you learn how to accept your loss.
Where we can use stop-loss?
Let's say your trading style is about support and resistance.
If you have a long entry, the best to put your stop-loss is on below on the support.
If you have short entry, the best to put your stop-loss is on above the resistance.
It's always up to you where you can set your stop-loss, just always remember that when you use it, you are minimizing your loss in ahead of time or once your chart becomes invalidated.
How to use stop-loss?
You can set your stop-loss once you already had your entry, so this order will be executed based on your condition manually entered.
Example on Bitmex:
For example, I bought(long) $500 worth of BTC at the price of $12,000.
I set my stop-loss sell order on $11,500, less $500 on my entry price.
So, once the price of BTC goes below or on $11,500, my sell order executed and I only lost around 4% on that trade.
This is example for Binance of Limit Stop-loss:
You will set an order:
and
Most of the exchanges don't have Market Stop-loss only the Limit stop-loss as far as I experienced different exchanges.
Conclusion
Using stop-loss is not worst at all. Accepting our loss is not bad. Minimizing our loss is absolutely good than maximizing it.
There will be a good trade set-up. Not all the time are good to trade, sometimes the best trade is not to trade.
Have you ever experienced liquidated on Margin Trading Exchanges? (Huge red/green wick candle?
) I want to share my weapon against that situation. Meet, STOP-LOSS.
What is Stop-loss?
Stop-loss is accepting your loss on the trade or you are minimizing your loss or cutting loss before getting rekt in ahead of time.
Why we need to use stop-loss?
Example:
As you can see the example above, you minimize your loss around 5%, because if you didn't exit on your trade or accepted your loss, you can lose a huge amount in the future if the price continues to dump.
Onto your next trade! Always remember that there will be always a good setup and sometimes much better if you learn how to accept your loss.
Where we can use stop-loss?
Let's say your trading style is about support and resistance.
If you have a long entry, the best to put your stop-loss is on below on the support.
If you have short entry, the best to put your stop-loss is on above the resistance.
It's always up to you where you can set your stop-loss, just always remember that when you use it, you are minimizing your loss in ahead of time or once your chart becomes invalidated.
How to use stop-loss?
You can set your stop-loss once you already had your entry, so this order will be executed based on your condition manually entered.
Example on Bitmex:
For example, I bought(long) $500 worth of BTC at the price of $12,000.
I set my stop-loss sell order on $11,500, less $500 on my entry price.
So, once the price of BTC goes below or on $11,500, my sell order executed and I only lost around 4% on that trade.
This is example for Binance of Limit Stop-loss:
You will set an order:
and
Most of the exchanges don't have Market Stop-loss only the Limit stop-loss as far as I experienced different exchanges.
Conclusion
Using stop-loss is not worst at all. Accepting our loss is not bad. Minimizing our loss is absolutely good than maximizing it.
There will be a good trade set-up. Not all the time are good to trade, sometimes the best trade is not to trade.