A stop loss is an order that closes a position automatically if the price moves against it by a set distance. It converts an open-ended risk into a defined one before the trade is taken. A stop is not a guarantee of the exit price: during fast markets or gaps, the order can fill at a worse level, which is called slippage.
Forex glossary
Stop Loss
Related term
Take Profit
A take profit is an order that closes a position once the price reaches a pre-set favourable level. Used together with a stop loss, it fixes both ends of the tr…
Spotted an error or a missing nuance?
Definitions are written by us and corrected when we are told we are wrong. If your broker quotes differently — especially on gold — say so and we will record the assumption.