#firstdealofthenewyearastylz Stop-Loss Strategies for Minimizing Forex Loss A stop-loss is a risk management tool used to automatically exit a trade when the price reaches a predetermined level. Effective stop-loss strategies help traders protect capital, reduce emotional trading, and improve consistency. 1. Percentage-Based Stop-Loss Risk a fixed percentage of your account per trade (e.g., 1-2% of capital). Ensures consistent risk exposure, regardless of trade size. Example: If your account balance is $10,000 and you risk 2%, your maximum loss per trade is $200. 2. Volatility-Based Stop-Loss (ATR Method) Uses Average True Range (ATR) to set stop-loss levels based on market volatility. Wider stops for volatile markets, tighter stops for stable markets. Example: If ATR is 50 pips, a trader may set a stop-loss at 1.5× ATR (75 pips). 3. Support & Resistance Stop-Loss Place stop-loss below support (for buys) or above resistance (for sells). Helps avoid premature stop-outs in volatile markets. Example: If buying EUR/USD at 1.1200, set stop-loss below support at 1.1150.