# TradingBasics

A stop loss in trading is a tool used to automatically limit your loss on a trade.
Simple meaning:
A stop loss is a price level you set where your trade will automatically close if the market goes against you, so you don’t lose more money than you’re willing to risk.
Example:
▪️You buy Bitcoin at $30,000
▪️You set a stop loss at $28,000
▪️If the price drops to $28,000, your trade will automatically close — limiting your loss to $2,000
Why it’s important:
▪️Protects your capital. 💰
▪️Removes emotional decision-making.
▪️Helps manage risk in volatile markets.
Types of stop loss:
▪️Fixed stop lo