A Stop Loss order is a risk management tool used to limit potential losses on a trade. When triggered, it automatically closes your position to help protect your account balance.
You can set a Stop Loss:
When opening a new trade
By modifying an existing position
Alongside a pending order
📍 Where to place a Stop Loss:
For Buy positions: Set the Stop Loss below the current market price
For Sell positions: Set the Stop Loss above the current market price
⚙️ How Stop Loss orders are executed:
Once triggered, the Stop Loss is executed using market execution
It is filled at the current Volume Weighted Average Price (VWAP), which may be:
At, above, or below your specified Stop Loss level
This can result in negative slippage, especially during periods of high market volatility, where the final execution price may differ significantly from the one you set.
Stop Loss orders are essential for responsible trading and can help reduce emotional decision-making and unexpected losses.