What is a Stop Loss?
A stop loss is an order used to automatically close a trade at a predefined loss level.
Why Traders Use Stop Loss
- Protect capital
- Reduce emotional trading
- Manage risk effectively
Example
If you buy EUR/USD at 1.1000 and place a stop loss at 1.0950, your trade closes automatically if price drops.
Related Terms
FAQ
Should every trade use a stop loss?
Most professional traders recommend using one.
