#StopLossStrategies stop loss is a trading strategy used to limit potential losses in an adverse market movement. It is essentially an order placed to sell a security if its price falls to a certain level, known as the stop price.

For example, suppose a trader buys a stock at $60 and sets a stop-loss order at $55. The stop-loss order is triggered if the stock price falls to $55 or below. The trader’s shares will be automatically sold to limit the trader’s losses.

While stop-loss orders can help limit potential losses, they do not guarantee that losses will be limited to the specified stop price. In fast-moving markets or during periods of extreme volatility, the price at which the stop loss order is executed may be significantly different from the stop price, resulting in larger losses than anticipated.