What are some common mistakes to avoid when using stop loss in the cryptocurrency market?

1 answers

• Alya Fatin Fadhiyah Muhaimin PSep 21, 2020 · 5 years ago
  When it comes to using stop loss in the cryptocurrency market, one common mistake to avoid is not setting a realistic stop loss level. Setting a stop loss too close to the entry price may result in premature exits and missed opportunities for profit. On the other hand, setting a stop loss too far away may expose traders to unnecessary risks and larger losses. Another mistake is not considering the volatility of the cryptocurrency being traded. Different cryptocurrencies have different levels of volatility, and it's important to set stop loss levels accordingly. Highly volatile cryptocurrencies may require wider stop loss levels to account for price fluctuations, while less volatile ones may require tighter stop loss levels. Additionally, it's crucial to avoid emotional decision-making when it comes to stop loss orders. Fear and greed can cloud judgment and lead to irrational trading decisions. Traders should stick to their predetermined stop loss levels and not let emotions dictate their actions. In summary, setting a realistic stop loss level, considering the volatility of the cryptocurrency, and avoiding emotional decision-making are key mistakes to avoid when using stop loss in the cryptocurrency market.
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