What is stop loss and how it works

[BIN-BIN]

I have been in trading for some time now and as I become more experienced in trading; I discover some terms in trading that have captured my interest, as these terms help me gain knowledge to maximize profits and minimize loss.

One among them is the (stop loss feature) some exchanges have developed this feature to help traders set limits on their trading to help put a hold on trading once a certain price is reached, but again most traders still run into losses because they inability to use this tool effectively.

That brings me down to my question, what is the best way to apply the stop loss features that will guarantee zero loss, and which exchange has the best and easy-to-use live trading features.

[carlfebz2]

That brings me down to my question, what is the best way to apply the stop loss features that will guarantee zero loss, and which exchange has the best and easy-to-use live trading features.

Guaranteed zero loss? It isnt possible and stop loss itself is just talking about cutting your loss when price tends to go lower on where you had set it out.So that already counts as loss.

When it comes to exchange platform then i do mainly suggest Binance or Kucoin.When it comes to indicators and tools then they do really have option for you to neither use beginner or advanced.

Dont force yourself on avoiding loss because theres no such thing about perfect trades.There are lots of tutorials in Youtube about on how to make use of stoplosses and its really helpful.
This is just only good when you are just day trading.

[jackg]

A lot of exchanges like etoro/trading212/primexbt have quite a handy feature for previewing your stop losses before setting them - they'll tell you how much you're likely to lose by setting the stop loss where you've put it.

Don't overrisk or overleverage on anything though. If you're risking 1% on each trade and not making a profit overall, you're risking too much- the best way to learn how to trade is to experience it (but without any yolo bets).

[Cherylstar86]

A lot of exchanges like etoro/trading212/primexbt have quite a handy feature for previewing your stop losses before setting them - they'll tell you how much you're likely to lose by setting the stop loss where you've put it.

Don't overrisk or overleverage on anything though. If you're risking 1% on each trade and not making a profit overall, you're risking too much- the best way to learn how to trade is to experience it (but without any yolo bets).

Though similar to that. Every time I do research about cryptocurrency and all of it's platforms which add up to my knowledge and learnings about cryptocurrency. As I remember stop loss is designed to limit an investor's on an security position. Stop loss works by automatically closing a crypto position when the price hits a pre-determined level. Stop-losses are essential for risk management; traders can calculate what position size to take and how much money to risk in a single trade.

[ccFOUND]

Stop loss is the level where you would want to set your maximum bearable loss for a specific trade. It helps you save some dollars rather than losing everything in that trade. Stop loss also helps you decide your risk:reward and calculating it while trading helps you gain much better profits. On Binance, you will need to set two stops (one for take profit and one for stop loss) because after their update, we cannot see any other option but to add two stops to prevent our position from going out of hands.

[blockman]

what is the best way to apply the stop loss features that will guarantee zero loss,

This is impossible. You're doing a stop loss because you're already losing and that's inevitable when you apply this strategy. You can stop loss if you ever meet 1% loss or more up to the amount of loss that you're okay to bear. And for more discussion, there's already a thread for the importance of stop loss. You will see people how they're stopping loss and how important it is and how it has changed their trading style. The link of the thread below.
(https://bitcointalk.org/index.php?topic=5333069.0)

[shield132]

I have been in trading for some time now and as I become more experienced in trading; I discover some terms in trading that have captured my interest, as these terms help me gain knowledge to maximize profits and minimize loss.

One among them is the (stop loss feature) some exchanges have developed this feature to help traders set limits on their trading to help put a hold on trading once a certain price is reached, but again most traders still run into losses because they inability to use this tool effectively.

That brings me down to my question, what is the best way to apply the stop loss features that will guarantee zero loss, and which exchange has the best and easy-to-use live trading features.

I'll try to explain it via example:
1. Imagine you bought BNB at the price 20.0
2. Price went up to 21.0 but you think that it may fall but at the same time don't want to end up in minus, so
3. You set price loss 20.4
4. It may not close exactly at 20.4, it depends on the loss rate, so, if it falls quickly, you may have to consider that instead of 20.4 it will close at 20.27 or something similar and you preserve yourself.
5. Also, if you set 20.0 and the loss rate would be high, you wouldn't be left with 0 profit but instead, it may close at 19.7 and you'll end up with some loss.

[BitMaxz]

Based on my experience with the stop-loss feature it won't trigger or be filled if you didn't set it properly the stop limit price should be lower than the limit price so that it will trigger when the price touches the stop limit price. You can set it to a 5-10% gap.
Also, don't set the stop limit near the current price it won't trigger based on my experienced.

Here's a quick guide to easily understand how it works.


Source: How to set Take Profit and Stop loss in Binance?

If you trade on Binance I suggest you check OCO it also has a stop-limit feature but this one is best for "locking potential profits or limiting risks".
Read more about this here https://academy.binance.com/en/glossary/one-cancels-the-other-order

[michellee]

You can search of Google what is stop-loss but I helped you to get some examples:

https://coinsutra.com/stop-loss-stop-limit/
https://www.mynewsdesk.com/se/coinpanel/blog_posts/why-are-stop-losses-important-when-trading-crypto-99745
https://tradesanta.com/blog/stop-loss

I am sure you will find tons of articles, including examples of how to use stop-loss on the internet.

Basically, stop-loss is how you can limit your losses, especially if the market is unpredictable and do not know when the price will go down. You use this feature to save your funds from a big loss. As per my experience, using stop-loss is help me a lot to quit from the market immediately when the price gets dump too deep. But we will have our own way of using the stop-loss feature.

[Lakai01]

-snip-
one can set a price to automatically placing a sell order when a certain price is reached. But I still need more explanation.

That's exactly the point, yes. You can see a stop loss (SL) as a lifeline that prevents you from taking too high losses when the price suddenly crashes ... But stop loss can also be used to hedge profits, especially in risky trades (Bitcoin has a steep price rise, ...). Here, for example, you can push the stop loss limit gradually upwards - one of the most beautiful things to do as a trader

[roosbit]

One among them is the (stop loss feature) some exchanges have developed this feature to help traders set limits on their trading to help put a hold on trading once a certain price is reached, but again most traders still run into losses because they inability to use this tool effectively.

Just to set the record straight, you can not escape making a loss in trading because of several factors at play like spreads, market manipulation, stop hunts etc. Losses are part of winning in trading.

That brings me down to my question, what is the best way to apply the stop loss features that will guarantee zero loss, and which exchange has the best and easy-to-use live trading features.

Zero loss doesn't exist in trading,  if someone told you they didn't make any loss then its all lies, can't your ties with them.

Btw when you are using a stop loss this is meant to minimize the loss you might suffer if running an open trade and it goes against your anticipated move.

[Zilon]

Zero losses actually exist if you apply shift stop loss. You may ask how do I mean. Let me explain let's assume you entered a trade and you have started seeing profit and you still want to hold on to your position because your analysis is still in the direction of your profit you can shift your stop loss either to your entry point or above your entry point that way you will exit with a zero loss if the trade goes against you

[tbct_mt2]

One of the Best Weapons in Trading

You will need to use Stop limit order to support stop loss order. When market crashes, Stop limit order will help to save your capital. Sometimes, stop loss orders will not be activated without Stop limit orders, with bad connections to exchanges or unstable operations of exchanges.

What is a stop limit order? (Binance Academy)

[Ararbermas]

Stop loss is a tools in trading that can help you to avoid big losses, you can always execute it every time you trade and it's very safe and useful tools to keep your money safe from the volatility of the market. In fact you can actually learn this kind of stuff through youtube if you want to. because for me in my personal opinion through watching video is very informative than other way of learning , wherein on that way you can actually apply it quickly as its like a real training, especially if it's a step by step tutorial it's very basic way if at the same time you're really interested to have such knowledge when it comes trading.

[Alisha-k]

In case stop loss is difficult to use you can still adopt stop limit both work similar things in different formats it would be wise if you expand more on both then get the one which would likely be more convenient for you but understanding the both will help you decide which to use depending on the nature of your trade at any point in time.

[RealMalatesta]

That brings me down to my question, what is the best way to apply the stop loss features that will guarantee zero loss, and which exchange has the best and easy-to-use live trading features.

There is nothing that can guarantee to avoid your losses. You must understand that before you read or think anything else.

Now coming to the stop-loss feature, it only is meant to help cut your losses and avoid emotional holding of shit coins. If something is dropping you better sell-off and leave rather than catching or holding the falling knife. You can just read stop-loss twice and you will realize it is only meant to stop the bleeding (loss) and cannot guarantee profits or cut down losses completely.

[breathlessz]

Stop loss is a tools in trading that can help you to avoid big losses, you can always execute it every time you trade and it's very safe and useful tools to keep your money safe from the volatility of the market. In fact you can actually learn this kind of stuff through youtube if you want to. because for me in my personal opinion through watching video is very informative than other way of learning , wherein on that way you can actually apply it quickly as its like a real training, especially if it's a step by step tutorial it's very basic way if at the same time you're really interested to have such knowledge when it comes trading.

just like what I do, youtube is my mainstay to learn something, with videos we can learn more clearly. As far as I know, with stop loss, we avoid bigger losses by exiting the market automatically according to the stoploss price we set. but we have to be mentally prepared sometimes when the stop loss works, suddenly the price goes back up

[el kaka22]

Everyone explained it well enough, I mean there isn't much to explain at this point about it. You can also check https://academy.binance.com/en/articles/what-is-a-stop-limit-order here as well, this will show you and explain to you as professionally as it gets from the best place in exchange world as well.

At the end of the day how good stop loss is only thing that we could argue about here, and I believe if you use it wrongfully then we are going to end up with something horrible in the long run as well, you should learn how to use it properly and without knowing how awesome it could be then you will use it horribly and that will make you think that stop loss as a bad thing. So, what you should do is not to just read about it, but then we should study it on live action as well, test it with small amounts, test it in demo game places and you will get the power of it eventually.

[Karish2return]

Stop loss is an efffective feature of finance max through which you can be safe from the big loss even we can't say that it can prevent you from a small loss or even zero loss but at a situation it is beneficial for the users. Always try to point stop loss whenever you don't know much about the coin price.

[ipanks]

just like what I do, youtube is my mainstay to learn something, with videos we can learn more clearly. As far as I know, with stop loss, we avoid bigger losses by exiting the market automatically according to the stoploss price we set. but we have to be mentally prepared sometimes when the stop loss works, suddenly the price goes back up

Youtube has so many stop-loss lessons from many traders to improve our skills and know when we should use stop-loss. Using stop-loss can be the way for us to prevent a big loss, especially if the market moves strangely and we are hard to analyze the situation. But many of us do not use a stop-loss feature because they feel confident with their skills and pretend that they really know where the market will go. That will be dangerous for them as they can get a big loss, especially if the coin price gets dump and we can not save our funds from the loss.