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Being in crypto is all about limiting your losses and trying as much as possible to make multiple profits. It’s very difficult to do because the market is very volatile and it’s difficult to predict the market. 

Prices swing every minute which means we should take advantage of the measures that have been put in place for us to minimize our losses. 

**Using stop loss order** is one of these ways to limit our losses or minimize our losses. This can also be seen as a way to lock in our profit or to ensure the profit made isn’t lost no matter how small it is. We tend to see these measures as ways to minimize losses but we should also try to see it as ways of making profits. 

The stop loss order which can be buy or sell is executed when the price of the cryptocurrency or asset reaches the set price. This set price is called the stop price and it is set and determined by you the user or trader. This is different from stop limit orders or limit orders. 

The stop limit order is a price set to be executed. It is a fixed price you have to determine. We should take note that with limit orders, once the price of the asset goes above or beyond the price, it is not executed. Prices fluctuate so much so that sometimes in a hike or a dump, the price you set set as a limit order hits and doesn’t even stay there for a second. 

However, with stop loss orders, the orders will always get executed as long as there are traders in the market and there is liquidity.  Even if the price fluctuates ano he or beyond the one you set, your stop loss order immediately becomes a market order and is executed. 

**Do you get the difference now?**

Some of us have had experiences where we set a limit price but we see that the market falls below our order or goes beyond our order and but our order does not get executed. This is due to the fact the the price is rapidly increasing or falling that causes our order not to get filled. 

But if we had used stop loss order, it would sell at a relatively closer price to our order. 

Stop loss orders deal with constant monitoring of the market to get a good price. You don’t do that when you use stop loss orders. 

With this one, you accept whatever you get and so when it gets executed you have no worries. It’s an ideal way to trade for short term traders. 

Aside helping traders minimize losses, it helps traders lock in their profits. 


Thank you.

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Posted Using [LeoFinance <sup>Beta</sup>](https://leofinance.io/@yahuzah/miniming-loss-in-trades-through-the-use-of-stop-loss)