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Glossary ยท investing

What is Stop-loss?

A pre-set price at which a position is automatically closed to cap losses.

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Stop-losses enforce discipline โ€” they take the emotion out of exiting losing trades. They also carry risks: gaps can cause execution at worse prices, and stops that are too tight get 'noised out' by normal volatility.

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Frequently asked questions

Where should I place a stop?

Below meaningful support levels or a fixed multiple of average true range. Avoid round numbers where many stops cluster.

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