Stop-Loss
Order Types
What it means
A pending order to close your position at a loss once price hits a set level. It caps how much you can lose on a single trade.
Example
You buy at $100 and set a stop-loss at $95. If price drops to $95, the position sells automatically, limiting your loss to about $5 per share.
Mistake beginners make
Beginners delete or move their stop-loss when price gets close, telling themselves "it will bounce." The one time you skip the stop is the one time it ruins your account.
Related terms
- Take-Profit — A pending order to close your position at a profit once price reaches a set level. It lock…
- Trailing Stop — A stop order that automatically moves up as the price moves in your favor, but never moves…