What are the common mistakes to avoid when setting a stop loss for digital currencies?

3 answers

• May 10, 2022 · 3 years ago
  One common mistake to avoid when setting a stop loss for digital currencies is placing it too close to the current price. While it may seem tempting to set a tight stop loss to minimize potential losses, it can also result in premature selling and missing out on potential gains. It's important to give the market enough room to fluctuate without triggering a stop loss too soon.
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• May 10, 2022 · 3 years ago
  Another mistake to avoid is setting a stop loss based solely on the amount of money you are willing to lose. Digital currencies are highly volatile, and their price movements can be unpredictable. Instead, consider setting a stop loss based on technical indicators or support levels to ensure you are not unnecessarily stopped out of a trade.
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• May 10, 2022 · 3 years ago
  BYDFi, a leading digital currency exchange, recommends using a trailing stop loss strategy to avoid common mistakes. A trailing stop loss adjusts automatically as the price of the digital currency increases, allowing you to lock in profits while still giving the trade room to grow. This strategy helps to protect your investment and maximize potential gains.
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