Stop-loss
A pre-set order that closes a trade at a defined level to cap the loss on that position.
A stop-loss defines your invalidation: the price at which your trade idea is wrong and you exit. Setting it before you enter — and sizing the position around it — is the core of risk-first trading.
A good stop sits where the thesis breaks (below structure, beyond a sweep wick), not at an arbitrary round number. The distance from entry to stop defines one unit of risk (1R), which anchors position size and every reward target.
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