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  • stop-loss

stop-loss

11 min read

Stop-Loss

A stop-loss is an order placed with a broker to automatically sell a security when it reaches a predetermined price. This tool is designed to limit an investor's potential loss on a position.

For example, if you buy a stock at $50 and set a stop-loss at $45, your broker will automatically place a sell order if the stock's price falls to or below $45. This helps to protect you from further losses in a declining market. It is a fundamental risk management tool for traders and investors. 

Table of Contents
  • What is Head and Shoulders?
  • Key Uses:
  • Head and Shoulders Anatomy
    • Pattern Components:
    • Pattern Psychology:
  • Types of Head and Shoulders Patterns
    • 1. Classic Head and Shoulders
    • 2. Complex Head and Shoulders
    • 3. Inverse Head and Shoulders (Head and Shoulders Bottom)
    • 4. Failed Head and Shoulders
  • Trading Strategies
    • 1. Classic Breakout Strategy
    • 2. Early Entry Strategy
    • 3. Retest Strategy
    • 4. Volume Confirmation Strategy
  • Volume Analysis in Head and Shoulders
    • Volume Pattern Significance
    • Volume Divergence Patterns
  • Combining Head and Shoulders with Other Analysis
    • Head and Shoulders + Support/Resistance
    • Head and Shoulders + Moving Averages
    • Head and Shoulders + RSI/MACD
    • Head and Shoulders + Fibonacci
  • Market Context Analysis
    • Bull Market Head and Shoulders
    • Bear Market Head and Shoulders
    • Ranging Market Head and Shoulders
  • Advanced Head and Shoulders Techniques
    • Multiple Timeframe Analysis
    • Head and Shoulders Variations
    • Failed Pattern Trading
    • Head and Shoulders Measured Moves
  • Common Head and Shoulders Mistakes
    • Mistake 1: Premature Pattern Recognition
    • Mistake 2: Ignoring Volume Requirements
    • Mistake 3: Poor Entry Timing
    • Mistake 4: Inadequate Risk Management
    • Mistake 5: Wrong Market Context
  • Head and Shoulders Timeframe Guidelines
  • Pattern Optimization
    • Reliability Factors:
    • Success Rate Statistics:
  • FAQs
    • How reliable is the Head and Shoulders pattern?
    • What's the difference between Head and Shoulders and Inverse Head and Shoulders?
    • How do you calculate Head and Shoulders price targets?
    • Can Head and Shoulders patterns fail?
    • What volume pattern confirms a Head and Shoulders?
    • How long should a Head and Shoulders pattern take to form?
    • What's the best entry point for Head and Shoulders patterns?
  • Tips for Success
  • Conclusion

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