Stop-loss
An exit order that limits loss at a predetermined level. It's where risk is defined; trading without a stop isn't risk-free, it's a trade with unmeasured risk.
The stop level goes where the scenario is invalidated: if your bullish view breaks when the last low is broken, the stop sits below that low. Once the stop distance is known, you calculate position size; the reverse (lot first, stop after) is wrong.
Moving the stop further away as the loss grows is the most common account-ending behavior. A trailing stop moves the stop behind price to lock in profit.
Related terms
Where it appears in the guides
Guides whose text uses this term; most frequent first.
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