What Is Stop-loss Order?

A stop-loss order is like a safety net for your investments. Whether you're dealing with stocks or cryptocurrencies, which can be pretty unpredictable, this tool helps you limit your losses.

How Does Stop-loss Order Work? 

Simple. You set a minimum selling price for your assets. If the price drops to that level, boom! The exchange automatically sells them off, saving you from bigger losses. This comes in super handy, especially with cryptocurrencies that can swing like crazy.

Example from Bitcoin and Ethereum

Take Bitcoin and Ethereum, for example. When they took a nosedive in 2021, stop-loss orders became even more crucial. They help you cash out before things get too ugly. Plus, you don't have to babysit your investments all day. Once you set up a stop-loss order, you can relax knowing it'll kick in if things go south.

You Still Able to Make Profit

And here's the kicker you can still make some gains with a stop-loss order. You set the selling price above what you paid for your assets, so even if they drop in value, you're not walking away empty-handed.

Conclusion

So, yeah, stop-loss orders are a lifesaver when things get wild in the stock or crypto market. They're like your guardian angel, protecting you from major losses in the blink of an eye.

Also Read

What is the Bitcoin Misery Index (BMI)?

What Is Indicator Negative Volume Index (NVI)?

What is Asset Financing and Its Role in the Crypto Industry

DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.