Stop loss trading is the practice of using predefined exit orders to cap downside and protect gains on every trade.

Stop loss trading is the practice of using predefined exit orders to cap downside and protect gains on every trade. By placing a stop-loss order at a strategic price level, you decide the maximum amount you're willing to risk before you enter, removing guesswork and emotion when markets move fast. Effective stops align with your strategy, timeframe, and volatility: swing traders may anchor stops below structure such as support, moving averages, or trendlines, while day traders often use intraday highs/lows or VWAP bands. Many traders scale protection with tools like Average True Range (ATR) to account for normal noise, then trail the stop as price advances to lock in profits. A sound stop loss plan works hand-in-hand with position sizing and a consistent risk-to-reward ratio, helping you survive losing streaks and compound winners across stocks, forex, futures, and crypto. Whether you're new or seasoned, mastering stop placement, adjustment rules, and execution quality can transform inconsistent outcomes into a disciplined, repeatable edge.

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