Stop-Loss Order

A stop-loss order is one of the most widely used financial instruments in cryptocurrency trading. It is also known as a stop order. It is commonly used as an effective risk management strategy in cryptocurrency trading. Traders use this mechanism to limit their losses by automatically executing an order when the price reaches a specific level.

A stop-loss order protects the trader from incurring significant losses by automatically exiting a trade before the price depreciates. This strategy is also used to lock profits by setting a stop order above the current market price for a profitable position, ensuring disciplined trading and reducing unexpected market volatility risks.