How to properly use stop loss?

Can you explain how to properly use a stop loss order in the world of cryptocurrency trading? I understand it's a tool to limit potential losses, but I'm unsure of the best practices and strategies when implementing it. What factors should I consider when setting a stop loss, and how can I ensure it's set at an appropriate level to protect my investments while still allowing for potential growth? Additionally, are there any common mistakes traders make when using stop losses that I should avoid?