Stop-Loss

When you open a position, you can simultaneously place a stop-loss order at a price level where you are willing to accept that the trade has moved against you. If the market reaches that price, the position closes automatically without you having to monitor it constantly.

There are different types of stop-loss orders. A standard stop-loss triggers a market order when the stop price is hit — the fill price may differ from the stop price if the market gaps (for example, overnight or at a news release). A guaranteed stop-loss (offered by some brokers for a premium) ensures execution at the exact stop price even during gaps.

Deciding where to place a stop-loss is a trade-off between giving the position room to breathe versus limiting the downside. Common approaches include placing stops below a structural support level (for long positions), at a fixed pip distance from entry, or at a position where the trade's original rationale is invalidated.

Position sizing and stop-loss placement are linked. The recommended practice is to decide first how much of your account you are willing to risk on a given trade (often expressed as a percentage of equity) and then calculate the lot size that keeps the loss at that stop level within that amount.

TrustFinance's broker comparisons note each platform's stop-loss order types, gap-slippage policies, and whether guaranteed stops are available — details that matter in fast markets.