Stop-loss order
Trading & ordersAlso called: Stop-loss
A resting order that activates only when price reaches a trigger level, used to cap losses.
In plain terms
Your pre-committed exit. It does not protect you against an overnight gap.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Bracket order
Trading & ordersAn entry order with a stop-loss and target attached.
In plain terms
Enforces intraday discipline at the cost of flexibility; squared off automatically.
Liquidity pool
Technical analysisA concentration of resting orders at a price level, most often stop-losses.
In plain terms
Where the rain has collected. Large participants move price into it because that is the only place size is available.
Position sizing
Risk & psychologyDetermining trade quantity from a fixed risk amount and the distance to the stop-loss.
In plain terms
Decide what you will lose first. Quantity is arithmetic after that.
SL-M
Trading & ordersStop-loss market order — on trigger it becomes a market order, guaranteeing exit but not price.
In plain terms
Gets you out for certain, at whatever price exists.
Stop clustering
Technical analysisThe tendency for stop-loss orders to accumulate at the same obvious levels.
In plain terms
Below swing lows, at round numbers, under moving averages — every book recommends the same place, so everyone uses it.
Trailing stop
Technical analysisA stop-loss that moves up as price rises, typically a set ATR multiple below the highest close.
In plain terms
Lets winners run, and always gives back a slice at the top. That giving-back is the price of the runners.
Gap risk
Risk & psychologyThe risk that a security opens far beyond your stop level, with no trading in between.
In plain terms
The reason position sizing, not the stop-loss, is your real risk control.
Price band
Trading & ordersAlso called: Circuit limit
The maximum a security may move in a session before trading stops in that direction.
In plain terms
At the lower circuit there are sellers and no buyers, so a stop-loss simply cannot fill.