

How to set stop loss and take profit? Practical skills for risk control of cryptocurrency transactions
In cryptocurrency trading, stop loss and take profit are the core tools of risk control. 1. Stop loss is used to automatically sell when the price falls to the preset point to prevent the loss from expanding; 2. Stop profit is used to automatically sell when the price rises to the target point to lock in profits.
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Cryptocurrency trading risk control core: stop loss and stop profit
In the volatile cryptocurrency market, effective risk control is the key to achieving stable profits. Stop loss and take profit are basic tools that every trader must master, and they can help you protect your principal and lock in profits in a changing market.
Understand the basic concepts of stop loss and stop profit
Stop-Loss refers to the system automatically executing the sell order when the asset price falls to the preset price to prevent further losses from expanding. Its core role is to "cut off losses" and protect your trading account from huge shocks.
Take-Profit means that when the asset price rises to the preset target price, the system automatically executes the sell command to lock in the profits that have been obtained. Its purpose is to "maintain profits" and avoid losing existing returns due to market pullbacks.
Scientific strategy for setting stop loss points
Technical support level method
Set the stop loss position below the key technical support level. These support levels can be previous lows, important moving averages (such as MA30, MA60), or trend lines. A break below key support usually means that the downward trend may continue, and leaving the market is a wise choice.
Fixed percentage method
According to individual risk tolerance, set a fixed loss ratio, such as 2% of the total account funds or 5%-10% of the amount of a single transaction . When the loss reaches this preset ratio, firmly execute the stop loss. This method is simple and direct, and helps to regulate transactions.
Volatility reference method
Indicators such as average true amplitude (ATR) are used to measure the normal range of volatility in the market. Setting the stop loss at the current price minus 1.5 times or 2 times ATR can effectively filter out market noise and avoid being wrongly stopped loss due to normal fluctuations.
Tips for rationally setting the take-profit position
Risk-reward ratio
Before opening a position, calculate your risk-reward ratio. A health risk-rewarding rate is generally recommended at 1:2 or higher . If your stop loss is set to a loss of $100, your stop profit target should be set to a profit of $200 or above.
Key resistance level method
Set the take-profit level near important technical resistance levels, such as the previous high, the key level of the Fibonacci pullback line (such as 61.8%), or the upper channel of the channel. When prices touch these areas, they often encounter selling pressure, which is a good time to lock in profits.
Advanced risk control skills
Mobile stop loss
A moving stop loss is a strategy to dynamically adjust the stop loss position. When the price moves in a favorable direction, the stop loss position also moves in the same direction, but will not retrace backward. This can not only protect existing benefits but also allow profits to continue to grow, and is a powerful tool to track trends.
Stop profit in batches
Don't try to sell at one time at the highest point. When the price reaches the first target position, you can first close some positions and lock in profits, and then move the stop loss of the remaining positions to the cost price, allowing the remaining parts to gain greater profits. This method can balance risks and returns and make the trading mentality more stable.
Mastering and flexibly using stop loss and stop profit strategies is the only way to form a mature trading system. With strict discipline and scientific approaches, you can better navigate the cryptocurrency market and achieve a long-term and stable return on investment.
The above is the detailed content of How to set stop loss and take profit? Practical skills for risk control of cryptocurrency transactions. For more information, please follow other related articles on the PHP Chinese website!

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