How do I set stop-loss orders in trading?

What is a stop-loss order and how do I set one?

A stop-loss order is a trading tool that automatically sells a security when it reaches a certain price. To set one, you typically specify the stop price when placing your order.

Can you explain the different types of stop-loss orders?

Sure! There are mainly two types: standard stop-loss orders, which sell at the market price once the stop price is hit, and trailing stop-loss orders, which adjust the stop price as the market price moves.

How do I determine the right stop price for my trades?

Determining the right stop price depends on your risk tolerance and the volatility of the asset. A common approach is to set it a certain percentage below the entry price.

Are there any risks associated with using stop-loss orders?

Yes, while stop-loss orders can help limit losses, they can also trigger during market volatility, potentially selling at a lower price than expected.