Can stoploss help us avoiding the risks?

<p id="isPasted">Yes, stop-loss orders can help you avoid risks by automatically selling a security when it reaches a certain price, called the stop price. This can help you limit your losses if the price of the security falls.&nbsp;</p><p>Stop-loss orders are a type of risk management order that can be used to help protect your profits or limit your losses. They are used by traders and investors to help manage their risk and protect their capital.</p><p>There are two main types of stop-loss orders:</p><ul><li><p>Stop loss:&nbsp;A stop-loss order is an order to sell a security if it falls below a certain price. This can help you limit your losses if the price of the security falls.</p></li><li><p>Take profit:&nbsp;A take profit order is an order to sell a security if it rises above a certain price. This can help you lock in your profits if the price of the security rises.</p></li></ul><p>Stop-loss orders can be a valuable tool for investors, but it is important to use them wisely. Here are a few things to keep in mind when using stop-loss orders:</p><ul><li><p>Set your stop-loss order at a reasonable level:&nbsp;You don't want to set your stop-loss order too close to the current price of the security, as you are likely to experience slippage. However, you don't want to set it too far away either, as you won't be effectively limiting your losses.</p></li><li><p>Trail your stop-loss order:&nbsp;As your trade becomes profitable, you can trail your stop-loss order up to protect your gains. This will ensure that you lock in your profits if the price of the security falls back.</p></li><li><p>Use stop-loss orders in conjunction with other risk management techniques:&nbsp;Stop-loss orders are not a foolproof way to avoid losses. It is important to use them in conjunction with other risk management techniques, such as diversification and position sizing.</p></li></ul><p>Stop-loss orders can be a valuable tool for investors, but it is important to use them wisely. By following the tips above, you can use stop-loss orders to help you manage your risk and protect your capital.</p>