Stop Loss
Risk
Stop loss is a pre-set order to close a position at a specific price to cap losses.
Stop loss is a pre-set order to close a position at a specific price to limit losses. Use of stop losses is foundational to most risk-managed trading strategies and is sometimes mandated by prop firms (especially in algorithmic accounts or after specific rule breaches).
Stop losses interact with platform-specific order types — stop-market vs stop-limit, server-side vs client-side — which determines how the order behaves around fast moves and gaps.
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