Protecting your assets during market volatility - The stop-loss

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Protecting your assets during market volatility - The stop-loss

 
Last week served as a powerful lesson in how quickly market dynamics can change. The sharp sell-off that began late on October 10th caught many by surprise, shaking confidence across the board. In less than 24 hours, Bitcoin tumbled from a stable range above $122,000 to a low of nearly $102,000, a drop of over 16%. The move pulled the entire market down with it, erasing significant value and leaving many investors looking for answers.

In times like these, when fear can drive decisions, the security of the platform where you hold your assets is non-negotiable. No exchange or broker can shield you from market risk.

Beyond the security Deriv broker provides, there are powerful tools you can use to manage your own risk during periods of high volatility. One of the most critical is the stop-loss order.

Your line in the sand: The stop-loss

A stop-loss is simply an instruction to the platform to automatically sell an asset if it falls to a predetermined price. Its primary purpose is to enforce discipline and remove emotion from your trading strategy. Instead of making panicked decisions during a rapid decline, you rely on a plan you created when you were thinking clearly.

Setting one up is simple. On the trading page, you would select a Stop-Limit order. You define your Stop Price—the level that triggers your sell order. This ensures that if the market turns against you, your position is protected according to your own rules, not by impulse. It’s a fundamental tool for capital preservation.

A long-term perspective on short-term moves

It’s easy to get lost in the noise of red charts and dramatic headlines. However, more experienced market participants understand that sharp corrections are a natural feature of any market, especially crypto. These events test conviction, but they also serve to shake out inexperienced participants and reset the market for a healthier foundation.

Your personal strategy should align with your own goals, but remember that patience and a well-defined plan are invaluable. The market will eventually find its equilibrium. Deriv's job is to ensure your funds are secure and the tools you need are always at your disposal.
 

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