Trading & Technical Analysis

What is a stop-loss order and how does it work?

A stop-loss order is an instruction to sell an asset automatically once its price falls to a level you set, designed to limit how much you lose on a position. For example, holding an asset at 100 with a stop at 90 means it sells if the price touches 90, capping the loss near that point. In fast-moving or thin markets the actual fill can be worse than the stop level, so it limits but does not eliminate downside. It is a position-management tool, not a guarantee against loss.

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