Stop losses and take profits are essential risk management tools used by traders to automatically close trades at predetermined price levels, minimizing losses and securing gains without constant monitoring of the market.
What is a Stop Loss?
A stop loss is an order placed with your broker to automatically close a trade if the market moves against you by a specific amount. It acts as a safety net to limit potential losses. For example, if you buy a stock at $100 and set a stop loss at $95, your trade will automatically close if the stock’s price falls to $95, protecting you from further losses.
Benefits:

Limit Losses: By capping your potenti...