Stop Loss is a pending order that is set for an order to close at a specific quote to limit losses.
Example: If you open a BUY order, you expect that the price will rise. You can set a STOP LOSS order at a quote that is below the price opening or current price. If the price starts moving in the opposite direction of your trade (down) the trade will close once the Stop Loss quote is reached. The Stop Loss level will close the order and will not allow for the price to decrease further to accumulate losses.
Example: If you open a SELL order, you expect that the price will fall. You can set a STOP LOSS order at a quote that is above the price opening or current price. If the price starts moving in the opposite direction of your trade (up) the trade will close once the Stop Loss quote is reached. The Stop Loss level will close the order and will not allow for the price to rise further to accumulate losses.
Take note: Stop Loss is often displayed as SL.
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