Risk also: SL, hard stop, protective stop

Stop-loss

A pending order that automatically closes a trade at a specified price to limit the loss if the market moves against the position.

Types of stop-loss

Fixed pip stop — set a number of pips from entry regardless of market conditions. Simple but ignores volatility.

ATR-based stop — set at entry minus a multiple of the Average True Range. Adjusts to current volatility; wider in volatile markets, tighter in calm ones. Most MT5 EAs use ATR stops.

Structure stop — placed beyond a recent swing high or low. Manual traders favour this; EA implementations approximate it with ATR.

The cardinal rule

Never move a stop-loss away from price to avoid a loss. The stop-loss is the proof that an EA has a loss limit. Moving it away turns a controlled loss into an uncontrolled one.

Related terms

See also