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STOP LOSS

That price where you admit that the idea was wrong and close the trade.

Published by The Retail Trader · JUL 31, 2026 · Risk Management

Stop Loss — the price where you realize that the idea was wrong and stop the trade.

WHERE THIS FITS IN

This term comes under Risk Management, in the section "TRADE-LEVEL RISK". Words inside a single trade:

RELATED TERMS TO READ

Other terms in this group — understanding them together is more useful:
• Hard SL vs Mental SL
• Target
• Risk-Reward Ratio (RR)
• R-Multiple
• Entry
• Exit
• Trailing Stop Loss
• Breakeven Stop
• Scaling Out / Partial Booking
• Invalidation Level

To read the entire group and all its examples at one place, see the journal "RISK MANAGEMENT: DICTIONARY OF AVOIDANCE" - this term has been taken from there.

This entry is for educational purposes only and is not a recommendation to buy or sell. Exchanges change charges, margins, lot sizes and expiry rules from time to time, so verify any figures with your broker or exchange.

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