Stop-Loss

What Is A Stop-Loss?

A stop-loss is an order to sell a security at a specified amount to manage loss.

When a trader wants to limit potential loss on a trade, a stop-loss order is placed to exit a position automatically at a specified price, defined by the trader. Stop-loss orders are designed to eliminate human emotions from trading. With a stop-loss order in place, the desire to hold on to losses is diminished.

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