Lesson 4 of 8
Stop-Loss & Take-Profit
Automate your exit strategy
1
Stop-loss: sell automatically if price drops to X. Limits your downside.
2
Take-profit: sell automatically if price hits Y. Locks in gains.
3
Trailing stop: moves up with the price. If stock rises from $100 to $120, a 10% trailing stop sells at $108.
4
Set these when you buy, not when you're panicking.
Buy at $100=Stop-loss at $90Max loss = 10%
the rule
Never enter a trade without knowing where you'll exit. Decide your stop-loss before you buy, not after.
Check yourself
What does a trailing stop-loss do?