How to Use Stop-Loss and Take-Profit Strategies for Safer Trading

• Blockchain Council
• February 17, 2025

Cryptocurrency trading in 2025 has evolved with new market trends, AI-powered analysis, and institutional involvement. Despite these advancements, risk management remains the most crucial factor for success. The use of stop-loss and take-profit strategies ensures traders minimize losses and secure profits, preventing emotional decision-making in volatile crypto markets.

In this guide, we will explore the best stop-loss and take-profit strategies for safer trading, highlight common mistakes to avoid, and show how Blockchain Council certifications can help you become a skilled trader.

Table of Contents

1. Introduction to Stop-Loss and Take-Profit Strategies
2. Why Stop-Loss & Take-Profit Strategies Are Essential in 2025
3. Types of Stop-Loss Orders
   • Fixed Stop-Loss
   • Trailing Stop-Loss
   • Percentage-Based Stop-Loss
   • Volatility-Based Stop-Loss
4. Types of Take-Profit Strategies
   • Fixed Take-Profit
   • Multiple Take-Profit Targets
   • ATR-Based Take-Profit
5. How to Set Stop-Loss and Take-Profit Levels 
6. Common Mistakes in Using Stop-Loss & Take-Profit
7. How Blockchain Council Certifications Help in Risk Management
8. Conclusion

1. Introduction to Stop-Loss and Take-Profit Strategies

A stop-loss order is an automated command that sells an asset when it drops to a predefined price to prevent further losses.
A take-profit order automatically sells an asset when it reaches a profit target, locking in gains before the market reverses.

These strategies are essential for crypto, stocks, and forex trading to protect traders from market manipulation, sudden crashes, and emotional trading decisions.

2. Why Stop-Loss & Take-Profit Strategies Are Essential in 2025

🔹 High Market Volatility

The crypto market in 2025 is more volatile than ever due to new regulations, AI-driven trading bots, and institutional involvement. Stop-losses ensure traders don’t suffer massive drawdowns.

🔹 Prevention of Emotional Trading

Traders often panic sell or FOMO buy when prices fluctuate. Stop-loss and take-profit orders remove emotions by executing trades automatically based on pre-set levels.

🔹 Improved AI & Trading Bots

With AI-based trading bots becoming more common, stop-loss and take-profit orders help manual traders compete with bots by securing gains and limiting risks.

3. Types of Stop-Loss Orders

Stop-Loss Type	How It Works	Best For
Fixed Stop-Loss	Sets a fixed price at which the asset will be sold.	Beginners & stable market conditions.
Trailing Stop-Loss	Adjusts as price moves in your favor, locking in profits.	Trend-following strategies & volatile markets.
Percentage-Based Stop-Loss	Limits loss to a specific percentage of total capital.	Risk-conscious traders & portfolio managers.
Volatility-Based Stop-Loss	Uses indicators like ATR to set dynamic stop-loss levels.	Advanced traders handling high volatility.

✅ Example:

If Bitcoin (BTC) is trading at $50,000, a trader using:

• A Fixed Stop-Loss might set it at $48,000.
• A Trailing Stop-Loss at 5%, meaning if BTC moves to $55,000, the stop-loss shifts to $52,250.
• A Volatility-Based Stop-Loss would adjust based on BTC’s average daily movement.

4. Types of Take-Profit Strategies

Take-Profit Type	How It Works	Best For
Fixed Take-Profit	Sets a specific price level to exit the trade.	Short-term traders & scalpers.
Multiple Take-Profit	Sells portions of the trade at different profit levels.	Swing traders & long-term investors.
ATR-Based Take-Profit	Uses volatility to set exit points.	High-frequency traders & algorithmic trading.

✅ Example:

If a trader buys Ethereum (ETH) at $3,000, they could:

• Set a Fixed Take-Profit at $3,500.
• Use Multiple Take-Profit targets at $3,300, $3,500, and $3,700 to gradually exit.
• Use ATR-Based Take-Profit that adjusts based on ETH’s volatility.

5. How to Set Stop-Loss and Take-Profit Levels 

Asset	Entry Price	Stop-Loss Strategy	Take-Profit Strategy	Risk-Reward Ratio
Bitcoin (BTC)	$50,000	5% Trailing Stop-Loss	Multiple Targets ($52K, $54K)	1:3
Ethereum (ETH)	$3,000	ATR-Based Stop-Loss	Fixed Take-Profit at $3,500	1:2
Solana (SOL)	$150	Fixed Stop-Loss at $140	Multiple Targets ($160, $170)	1:2.5
Polygon (MATIC)	$1.50	Percentage-Based Stop-Loss (5%)	ATR-Based Take-Profit	1:3

6. Common Mistakes in Using Stop-Loss & Take-Profit

❌ Setting Stop-Loss Too Tight – Causes frequent stop-outs from small price fluctuations.
✅ Solution: Use volatility-based stop-losses to avoid unnecessary losses.

❌ Ignoring Risk-Reward Ratio – Many traders set small stop-losses but unrealistic profit targets.
✅ Solution: Always maintain a 1:2 or 1:3 risk-reward ratio.

❌ Not Adjusting Stop-Loss in Volatile Markets – Crypto prices can change fast, requiring strategy adjustments.
✅ Solution: Use trailing stop-losses for active trades.

7. How Blockchain Council Certifications Help in Risk Management

If you want to master crypto trading and risk management, consider certifications from the Blockchain Council, which provide expert knowledge on stop-loss strategies, market analysis, and portfolio protection.

✅ Recommended Certifications for Traders:

📌 Certified Cryptocurrency Trader™ (CCT) – Covers stop-loss, take-profit strategies, and technical analysis for safer trading.
📌 Certified Blockchain Expert™ (CBE) – Helps traders understand blockchain fundamentals and market trends.
📌 Online Degree™ in Cryptocurrency & Trading – A complete program covering risk management, AI trading bots, and DeFi strategies.

✅ Technical Certifications from Global Tech Council:

📌 Certified Node.JS Developer™ & Certified React Developer™ – Essential for those interested in building trading bots and automated strategies.

✅ SEO & Digital Growth Certifications from Universal Business Council:

📌 Certified SEO Expert® – Helps traders optimize their crypto blogs & YouTube channels for trading insights.
📌 Certified Instagram Growth Expert – Ideal for crypto traders building a social media presence.

8. Conclusion

In 2025, stop-loss and take-profit strategies are more crucial than ever due to AI trading bots, extreme volatility, and institutional participation. These automated tools help traders protect capital, secure profits, and trade with confidence.

To enhance your risk management skills, enroll in Blockchain Council’s Certified Cryptocurrency Trader™ (CCT) certification, designed to help traders optimize stop-loss and take-profit strategies effectively.

By applying these strategies, traders can maximize profits while minimizing risks, ensuring long-term success in the crypto market.