What are the common mistakes when setting stop-loss orders?

What are the common mistakes when setting stop-loss orders?

Some common mistakes include setting stop-loss orders too close to the market price, not adjusting them as the market moves, and ignoring market volatility.

Why is it a mistake to set them too close?

Setting stop-loss orders too close can lead to being stopped out of a position due to normal market fluctuations, resulting in unnecessary losses.

How often should I adjust my stop-loss orders?

You should adjust your stop-loss orders regularly, especially when the market moves significantly or when your trade reaches a certain profit level.

What is the best strategy for setting stop-loss orders?

A good strategy is to use technical analysis to determine key support and resistance levels, and set your stop-loss just below support or above resistance.