A stop-loss order is a risk management tool in trading that automatically sells an asset when its price reaches a predetermined level, limiting potential losses. Types of stop-loss orders: ✅ Standard stop-loss order: converts to a market order when the price reaches the stop level. ✅ Stop-limit order: sells only at a specified price or better, but may not be executed in fast-moving markets. ✅ Trailing stop-loss order: is adjusted as the price rises, securing profits while limiting declines. Why use a stop-loss order? 🔹 Protects capital by limiting losses. 🔹 Removes emotions from trading. 🔹 Automates risk management. ⚠️ Note: Prices may vary, and short-term volatility may lead to early exits. Use wisely.
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