Stop-loss: what it is and why it matters
Imagine sleeping peacefully knowing you won’t lose everything in a sudden drop. That’s what a stop-loss does.
TL;DR
- ⚠️ Stop-loss = order to limit losses.
- ⚠️ Prevents being trapped in crashes.
- ✅ Works in spot and futures.
- ⚠️ Poor setup can stop you out early.
Context
Stop-loss is a risk management tool. It doesn’t guarantee profits but it protects your capital.
Prerequisites
- Active account at Binance.
- Know how to place spot or futures orders.
- Define your loss tolerance.
Step by step
- Choose the asset you want to buy.
- Decide your entry price.
- Set your max loss (e.g., -5%).
- Place a stop-limit order on Binance.
- Check it under “open orders”.
💡 Tip: use trailing stop to follow uptrends. ⚠️ Safety: never leave positions without stop in volatile markets.
Security checklist
- ⚠️ Always use stop-loss in leveraged trades.
- ⚠️ Risk max 1–2% per trade.
- ⚠️ Don’t lower your stop out of fear.
- ⚠️ Adjust stops as price rises.
- ⚠️ Avoid obvious stops right at strong supports.
Common mistakes and how to avoid them
- No stop-loss → total loss. Fix: always set one.
- Too close → stopped too early. Fix: give room.
- Moving it emotionally → ruins your plan. Fix: respect strategy.
- Huge trades without stop → extreme risk. Fix: discipline.
Practical examples
- Buy BNB at 300 USDT, set stop at 285. Loss capped at 5%.
- If price rises to 330, move stop to 315 to lock in gains.
Quick comparisons
- With stop-loss: discipline, risk control.
- Without stop-loss: gambling, chaos.
Editorial note
Stop-loss is boring—until it saves your account. Then you get it.
Next step
Read [Crypto security essentials](/en/guides/security).
Results / Conclusion
Stop-loss doesn’t erase risk, but it lets you survive. And survival is rule number one in crypto.