Stop Loss

A stop loss is a pre-set order that closes your position automatically when price hits a certain level against you. You set it the moment you enter the trade. If price goes there, the broker closes you out — no hesitation, no hope, no "it'll come back." Stops are not optional. They are the single most important tool in trading. Every pro has a stop on every trade, without exception. The stop is what turns trading from gambling into business: it caps your worst-case loss to a known, survivable number. Stops go behind the level that invalidates your trade idea, not at a random dollar amount. If you went long because price held support, your stop goes below that support. If the support breaks, your idea was wrong — and you want out.