Welp, you might have gotten burned today. I hope not, but it happens. Wouldn't you like to...stop...losses?
The shit's not rocket science. But neither is it bulletproof. On Poloniex, for instance, there's a big damn box that says STOP-LIMIT.
This box is your friend.
The STOP is the trigger price that sets the condition. LIMIT is the actual price you want to buy or sell at.
Taking daily price swings into consideration, you can set an automatic sell trigger (or a buy) to occur when a price point is reached. The main detail, which should go without saying, is setting the stop loss price at a point where you're comfortable with the gains you've accrued. Stop loss doesn't help if you're already in the red.
It can be a pain when you can't watch your portfolio obsessively all day. For instance, a larger than normal bitcoin dip, rapidly corrected, can leave you watching a speeding train leaving the station. A common tactic of whales is to keep grinding down by selling and triggering stop losses, and snapping up your artificial panic sells.
That's why you want to put some thought and technical analysis into your stop loss prices. Properly handled, you can ride things out in style, buy more at the low, and then be sitting pretty when things turn around. Which beats the hell out of watching 30% of your holdings go down the drain. If that does happen, of course, your best bet is to just ride it out. Sometimes you just gotta sell at a loss, I guess. It's a pretty bad habit that I don't recommend.
Some of this can be mitigated by hedging your portfolio. I like being about half Bitcoin/half alts.
So, if some of your alts are down 20-30% today, imagine if you had a stop-loss set for each one that insured you turned a profit AND enabled you to buy back in that much cheaper. It takes work. It takes a certain degree of balls. It's not exactly easy. But that is how fortunes are made.
You can also do this for buys. Let's say coin X is $10.00. You might put in a STOP at $9.00 that causes a buy order at $8.00. If nothing else, it gives you a bit more control than just setting a buy price at some desired amount and leaving it like that. But that's more of a stock thing, where executing a market buy on a volatile stock can result in you paying more than you wanted to. I don't see this happening in the crypto market. I feel it's generally a bad idea to buy at market price unless you're sure you're at the bottom of a dip. Why not set your buy price 2.5-5% lower than current market price?
If you really want to finesse the market, and you have the funds, you can actually set several limit orders up at increasingly higher price points, and help lead the market in the direction you want to go. I watch bots do this all day long. I call them breadcrumbs. Lots and lots of small sells or buys that lead the price to their actual target. Of course, the more you're speculating with, the more you can influence the market.
Ideally, you could trade with two whole Bitcoin this way, always keeping one in reserve at all times, and using one to churn via stop limits. Still, there's no good reason to lose money. Stop looking up in the sky at what might be, and take a look in the other direction. Cover your ass. Not losing money is half the battle.