“Observing that he had not put in a stop-loss order I spoke to him about it and he told me that the break hadn't fairly begun and he wasn't going to be shaken out by any one-point reaction. This was in August. Before the middle of September he borrowed ten dollars from me for a baby carriage -- his fourth.”
Edwin LefevreReminiscences of a Stock Operator
Thank you for taking your time to read my post. Today, let’s consider an important and practical issue on stop orders. What is a stop order? What is special about them? Why do traders need stop orders?
Stop Loss is an order placed by a trader on a trading platform to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investor’s loss on a position in a security. It is also known as a “stop order” or “stop-market order.”