A stop-loss is a predetermined price at which a trade is exited to prevent further losses, while a target is the price at which a trader plans to book profit. Both are essential to any trading plan. A good strategy often uses the risk-reward ratio—for instance, risking ₹100 to make ₹300 (1:3 ratio). This ensures that even with a lower win rate, a trader can stay profitable. Placement of stop-loss should be logical, such as below support levels or above resistance zones—not arbitrary. Similarly, targets should align with the next key technical level. Dynamic strategies include trailing stop-loss, where the stop moves up as the price moves in your favor. Some traders prefer fixed targets, while others scale out of trades in parts. It’s important never to move your stop-loss in the hope of recovery. Consistently following your stop-loss and target rules enforces discipline and protects capital—two things every trader must preserve.