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Stop-loss

In one line: A stop order used to cap the loss on an open trade.
Watch: What to Do When Your Stop Looks Too Wide: Size Down, Don't Move It · open on YouTube · 1-minute Short
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A stop-loss is a Stop order placed on the losing side of your trade. Bought at 100? A stop at 95 tries to get you out if price falls to 95.

'Tries' is the key word. The SECThe US stock market regulator. explains the actual fill can be worse in a fast market. The distance to your stop is also what you use in Position sizing.

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Related

Sources & studies

  1. Investor.gov (SEC): Investor Bulletin on stop, stop-limit and trailing stop orders
  2. Investor.gov (SEC): Investor Bulletin – stop, stop-limit and trailing stop orders

Order typesStop orderPosition sizing

Last checked: 2026-11-04 · Educational, not financial advice.

Education only, not financial advice. No signals. Backtests are hypothetical: real trading can be worse. Past results don't predict future results.