I Tested 4 Stop Loss Methods on My Crypto Bot — Here's What Actually Works

Running an algorithmic trading bot is one of those things that sounds glamorous until you watch your carefully crafted strategy bleed money because your stop loss logic is garbage. I've been running a Freqtrade-based crypto bot on Bybit for several months now, trading BTC/USDT, ETH/USDT, SOL/USDT, and a handful of altcoin futures pairs. Over the past 3 months, I systematically tested four different stop loss approaches to figure out which one actually protects capital without killing profitability. Here's what I found. Method 1: Fixed Percentage Stop Loss The simplest approach. Set a fixed percentage below your entry price. If the trade drops by that amount, you're out. I tested three variants: -2% , -3.5% , and -6% . # Freqtrade strategy — fixed percentage stop loss class MyStrategy ( IStrategy ): stoploss = - 0.035 # -3.5% fixed stop loss # No trailing, no custom logic trailing_stop = False Pros: Dead simple to implement and understand Predictable risk per trade Easy to calculate pos