What is a Stop-Loss Order?. A stop‑loss is an instruction to sell if price reaches a specified level. It limits downside without constant monitoring.
How it works
Exchanges trigger orders when last price or index price crosses the stop. Advanced types include trailing and stop‑limit.
Why it matters
Stops protect capital and remove emotion from exits.
Common pitfalls
- Placing stops exactly at obvious levels
- Using market stops in illiquid pairs
- Ignoring slippage during fast moves
Quick example
You set a stop‑limit under support so a failed breakout does not become a large loss.
See also
- Liquidity
- Risk Management
- Position Sizing
TL;DR: What is a Stop-Loss Order? defined in plain English with practical next steps.
Add comment
You must be logged in to post a comment.