Stop-Loss
A rule that closes a losing position at a predefined level — the price of staying in the game.
What it means
A stop-loss caps a single trade's damage: beyond this loss, exit, no debate. Its purpose is not to be right — stops get hit on trades that would have recovered — but to make the worst case survivable and the system's risk calculable.
Stops are not free protection: price can gap or reopen through a stop level, filling far below it. That residual tail is why stop distance, position size and a time exit work as a set, not as alternatives.
Why traders care
- Converts unbounded downside into a budgeted, sizable cost.
- Enables position sizing: risk per trade = size × stop distance.
In a TraderWe strategy
if ProfitPct <= -2:
Sell()Cut the trade at −2% — small enough to take many times, survive them all.
Related terms
Educational content, not investment advice. Engine details describe how TraderWe computes this value; other platforms may define it differently.