StopLoss is works by automatically closing the position when the price hits a preset price level. This price level is called the stop loss. Stop-loss orders are used to reduce the risk for traders when they predict the wrong direction of the market.
A stop loss order indicates a fixed price lower than the bid price, chosen by the trader. If the market goes against the analysis (expectations) and reaches the correct stop loss, the system will close the trade (sell). Conversely, if the price does not reach the stop, the order will not be executed.

Is it necessary to set StopLoss?

Stoploss orders help traders limit the maximum loss that they can accept. When the price reaches the stop loss, this order will be triggered to ensure that you don't lose more money if the price continues to plummet. Therefore, the stoploss order is very necessary for those who trade with large leverage - trade margin/futures. Stoploss helps you preserve the capital you have.

Effective Stoploss Strategies

Use a fixed R:R (Risk:Reward) ratio: Risk must be less than or equal to Reward).
Use moving averages EMA  as moving support resistance.
Use fibonacci to identify support resistance (put stop loss below support and above resistance).
Using divergence signals of several momentum indicators determine the moment of price reversal.
Based on reversal candlestick patterns or Price Action.

Some mistakes when placing Stoploss

The stop loss is too far
Placing Stoploss far away will give you peace of mind when you think that this order is difficult to activate as well as limit the Stoploss being swept by the market (exchange floor). However, if the market reverses suddenly or your initial analysis is wrong, the amount of loss will be quite large.
Stop loss is too close
Contrary to placing a stop loss too far, a close stop loss will make your order very vulnerable to a Stoploss sweep - small movements will trigger an unnecessary sell order.
Continuously move Stoploss
Moving Stoploss is only appropriate when your trade is profitable. At that time, you should move Stoploss to entry (set Stoploss positive) to preserve the capital you have.

Stop-loss orders are quite useful for short-term traders (Day traders). Here are some things to keep in mind during the transaction:
Once you have placed a Stoploss order, leave it and wait for the order to execute itself. Limit removing orders or changing Stoploss points when losing.