Costs & risk

Stop loss

A stop loss is an order that closes a position automatically when the price moves against it to a level you set. It limits the loss in normal conditions, but in a gap or fast market it may fill at a worse price.

Also called: SL, stop-loss, stop loss order

Hypothetical example

Hypothetically, you buy EUR/USD at 1.1000 with a stop loss at 1.0970, 30 pips away. If the price falls to 1.0970 the position closes with a 30-pip loss; if the market gaps to 1.0950, it closes there, with a 50-pip loss.

Used in these guides

Costs & risk8 min read
Stop loss and take profit
How stop loss and take profit orders close a position automatically, how to read the distance in pips and money, and their limits.
Basics8 min read
Going long and short: how buy and sell trades work
A long trade gains if the price rises; a short trade gains if it falls. Both lose money when the price moves the other way.
Costs & risk8 min read
Position sizing: how to work out how many lots to trade
A step-by-step method for setting the size of a trade from the amount you are prepared to lose, your stop loss and pip value.

Back to the glossary

Risk Warning: CFDs are complex instruments and come with a high risk of losing money.

Stop loss

Hypothetical example

Related terms

Used in these guides

Stop loss and take profit

Going long and short: how buy and sell trades work

Position sizing: how to work out how many lots to trade