Trading glossary
Stop Loss
A stop loss is a pre-planned order that closes a trade at a fixed price to limit loss if the market moves against you. It is the core risk management tool in trading: it defines the maximum you can lose on a trade and turns an open position into a bounded risk. Consistent use of stop losses is one of the strongest predictors of long-term survival, and reviewing whether you actually honor your stops is a primary use of a journal. In Traders Vault you can record planned versus actual stops and review how often you move or abandon them.
What is Stop Loss in trading?
A stop loss is a pre-planned order that closes a trade at a fixed price to limit loss if the market moves against you. It is the core risk management tool in trading: it defines the maximum you can lose on a trade and turns an open position into a bounded risk. Consistent use of stop losses is one of the strongest predictors of long-term survival, and reviewing whether you actually honor your stops is a primary use of a journal. In Traders Vault you can record planned versus actual stops and review how often you move or abandon them.