The 3 Stop Loss Techniques are:

1.Dynamic Trailing Stop
A trailing stop adapts to price movements, maintaining a fixed distance between the current price and the stop-loss level. This distance can be set as either a percentage or a specific point value. As the market price moves favorably, the stop adjusts accordingly, protecting gains while reducing potential losses.

Benefits: Adjusts automatically to market trends, ensuring profits are secured during upswings while curtailing losses during downturns.
Example: If a stock is purchased at $50 with a trailing stop of 10%, the initial stop would be at $45. If the stock rises to $60, the stop moves up to $54, securing gains while guarding against losses if the stock's price drops.

2.Support and Resistance Zones
Support and resistance levels indicate significant price areas where buying or selling has historically occurred. By placing stops below a support level or above a resistance level, traders can better navigate sudden market swings.

Benefits: Stops placed near these zones often get triggered by significant shifts in market sentiment, offering reliable protection.
Example: If an index consistently rebounds from a support level of 1000, placing a stop loss below this at 990 would minimize potential losses if the index falls through this key level.

3.ATR-Based Stops
The Average True Range (ATR) measures market volatility over a set period. Using the ATR, traders can set stops that account for current market volatility, providing tighter stops during calm periods and looser stops during volatile ones.

Benefits: Tailors stops to prevailing market conditions, reducing risk by responding to changes in volatility.
Example: If a stock's ATR is $1, a trader might place a stop at 2x ATR or $2 below the entry price, accommodating the daily volatility range.

Applying the Strategies: Three Scenarios

Scenario 1: Dynamic Trailing Stop
Situation: A trader buys tech company shares at $200, expecting them to climb with new product releases.
Action: The trader sets a trailing stop 10% below the purchase price to avoid selling too early while safeguarding against downturns.
Outcome: The price rises to $250. The trailing stop adjusts to $225 (10% below $250). When the price drops to $220, the stop is triggered, locking in a $25 per share profit.

Scenario 2: Support and Resistance Zones
Situation: A forex trader watches the USD/JPY pair fluctuating between 110 and 115 yen.
Action: The trader buys at 111 yen, just above support, and sets a stop at 109.5 yen to protect against a significant drop.
Outcome: The price rises to 114 yen, then reverses but does not break below 110 yen, keeping the stop intact. The trader later sells at 113 yen, securing a favorable profit.

Scenario 3: ATR-Based Stops
Situation: A commodities trader goes long in crude oil futures during a volatile period.
Action: The ATR indicates a value of $2, so the trader sets a stop $4 (2x ATR) below the entry price.
Outcome: Crude oil prices fluctuate due to geopolitical tensions but remain above the stop. As the market stabilizes and rises, the trader adjusts the stop upwards periodically, maximizing gains before exiting with a substantial profit when prices normalize.