What Is Stop Loss? How to Place a Stop Loss Order in Crypto

1. What Is Stop Loss?

A Stop Loss order is designed to limit your losses by automatically selling an asset when its price falls to a predetermined level .

Example: If you buy Bitcoin at $30,000 and set a stop-loss at $28,000, once it drops to that level, the system will sell your Bitcoin to prevent further losses.

2. Why Use Stop Loss?

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• Loss prevention: Auto-sells to cut losses.

• Mental relief: No need to monitor the market all the time.

• Trading discipline: Helps avoid emotional decision-making

3. Types of Stop Loss in Crypto

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• Fixed Stop Loss: Set a fixed price, e.g. ETH stop-loss at $1,800 .

• Trailing Stop Loss: Adjusts with asset gains, e.g., a 5% trailing from $2,000 to $2,100 moves the stop-loss from $1,900 to $1,995 

4. How to Place a Stop Loss on Binance

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• Step 1: Log in to your Binance account.
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• Step 2: Select the trading pair (e.g., BTC/USDT), determine levels using technical analysis.

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• Step 3: Choose Stop‑limit order and fill in:

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  • Stop price: trigger level

  • Limit price: sell price post-trigger (usually lower)

  • Amount: quantity to sell

  • Confirm and submit. The order remains pending until execution 

5. Tips for Using Stop Loss

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• Avoid placing it too close to the purchase price to prevent premature execution.

• Regularly review and adjust as markets shift.

• Use technical analysis to determine strategic levels .