Recent market fluctuations have many people testing the waters on the edge of losses. The most heartbreaking thing isn't small losses, but rather knowing you could exit with a small loss yet stubbornly hold on due to psychological resistance, only to end up with a big loss and being forced to cut your position.

How exactly should you set your stop-loss? This question seems simple, but in reality, it determines how long you can survive in the market.

**Core Concept: Stop-loss is not surrender, it's a trader's moat**

The mathematical law is cruel—losing 50% requires a 100% gain to break even. When your judgment is wrong, instead of hoping for a rebound, it's better to decisively cut losses and preserve your capital. It's like wearing a seatbelt while driving—not admitting you'll crash, but leaving a safety net for uncontrollable risks.

**Five major stop-loss methods, explained thoroughly:**

**1. Technical Stop-Loss**

Set your stop-loss at points that prove your judgment was wrong. For example, if a support level is broken, a trendline is breached, or key technical indicators are pierced—these are clear exit signals. Randomly setting a stop-loss is equivalent to self-sabotage.

**2. Dynamic Trailing Stop-Loss**

As the market moves, your stop-loss should move too. Use moving averages to track trend direction, and ATR indicators to dynamically adjust your stop-loss range based on volatility. This way, you avoid being knocked out by minor fluctuations but can exit promptly when the trend reverses.

**3. Capital Management Stop-Loss**

This is the most professional approach—first ask how much you can afford to lose, then determine how much to buy. Use the 2% rule: limit each loss to 2% of your total capital, and then work backward to determine your position size and leverage. Your wallet defines your risk tolerance.

**4. Psychological Discipline Stop-Loss**

Set your stop-loss and then execute it. The two most common mistakes are holding on during rebounds and moving stop-losses arbitrarily. These are self-deceptions. Cutting losses short and letting profits run—that's the right way.

**5. Time Dimension Stop-Loss**

If the market doesn't develop in the expected direction within a certain period, even if the price hasn't hit your stop-loss, consider exiting and re-evaluating your logic.

**Final words**

Trading is a long-term game, not short-term gambling. Mastering stop-loss is key to surviving longer.