Stop-Loss
A stop-loss is an order that sells a position automatically if the price falls to a level you chose, capping the loss on a trade.
Also known as: stop loss, stop order
A stop-loss is set before or just after entering a trade, at a price where the idea is clearly wrong. If the market trades down to it, the exchange sells for you, so a bad trade costs a known amount instead of whatever the price does next. Placing it just beyond a support level, rather than a round number everyone else is using, avoids being stopped by ordinary noise.
A stop is not a guarantee: in a fast market the order can fill below the stop price, and on a leveraged position the liquidation price can arrive first. Work out how much you can lose before choosing the level with the position size calculator, and see the position sizing and stop-loss guide.