Stock market glossary
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Stop loss
A stop loss is an automatic sell order that triggers when the price falls below a threshold, to limit losses.
If you buy at €20 and set a stop loss at €18, the stock is sold if the price falls to €18: you decide in advance how much you're willing to lose, without being driven by the emotion of the moment. A stop that's too close, however, can take you out on a simple fluctuation.
💡 On Fanta-Trade you can set a stop loss on your positions and see when it would have protected you and when it would have taken you out too early.
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