Stop-Loss Order

A stop-loss order is an automated trading instruction that triggers a sell order when an asset's price drops to a specified level. It is designed to limit potential losses by automatically closing a position before the price falls further. For example, if a trader buys Bitcoin at $50,000 and sets a stop-loss at $45,000, the position will be sold automatically if the price reaches that threshold. Stop-loss orders are a fundamental risk management tool used by both beginner and experienced traders.