Stop-Loss Order
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A Stop-Loss Order is a type of trade setup that automatically sells a crypto asset when its price drops to a specific level, helping limit potential losses.
How a Stop-Loss Order Works
Traders set a predefined price (the stop price) at which the system will sell the asset as a market order. For example, if you own Bitcoin at $30,000 and set a stop-loss at $28,000, the order activates when the price hits $28,000, aiming to minimize further loss.
Why Stop-Loss Orders Matter
In the highly volatile crypto market, stop-loss orders help manage risk and protect portfolios from large drawdowns. They remove emotional decision-making by enforcing a clear exit strategy, especially useful for traders who can’t monitor the market 24/7.