Cryptocurrency Q&A
What is the rule of thumb for stop loss?
What is the rule of thumb for stop loss?
Federico
Sat Oct 12 2024
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7 answers
1935
I'm wondering about the general rule or principle that investors or traders usually follow when it comes to setting a stop loss. I want to know the common practice or standard guideline for this strategy.
7 answers
amelia_doe_explorer
Mon Oct 14 2024
By adhering to the 2% Rule, traders can maintain a balanced approach, safeguarding their capital from excessive volatility.
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CryptoEmpire
Mon Oct 14 2024
To illustrate, let's consider a trader with a $50,000 account. If they decide to implement the 2% Rule, they should limit their risk to $1,000 per trade.
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Raffaele
Mon Oct 14 2024
This calculation is straightforward: 2% of $50,000 equals $1,000. Thus, regardless of the trade's outcome, the trader's losses will not exceed this predetermined amount.
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SolitudeSeeker
Mon Oct 14 2024
A widely employed strategy in managing investment risks is the 2% Rule. This principle dictates that traders should not expose more than 2% of their account's total equity to potential losses in any single trade.
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ethan_thompson_journalist
Mon Oct 14 2024
The rationale behind this rule is to ensure that even if a trade goes awry, the financial impact remains manageable and does not significantly affect the overall portfolio.
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