When should I write the word lose and when should I write loose?

Don't lose your mind when you have to spell these similar words! Lose means to be unable to find. Loose, an adjective, means unrestrained or inexact.

I lose the loose change I keep in my pocket.
The poem loses its power in such a loose translation.

Loose can be used as a verb. (You really might not see it this way often.) It means to set free or make less tight.

She loosed the snake into the crowd.
He loosed (more commonly, loosened) the victim's clothing.