Stop loss
An order that closes a trade at a set price to cap the loss. It marks the point where the trade idea is proven wrong.
Set it with the order, size the position from its distance, and never move it further away once you are in.
Read the full guide: Risk management.
In practice
A signal buys GBP/USD at 1.2700 with a stop at 1.2660, 40 pips away. A trader risking $80 sizes the trade at 0.20 lots (40 × $10 × 0.20 = $80), so a stop-out costs exactly the planned amount.
Moving the stop further away as price approaches it. That turns a planned, small loss into an unplanned, large one.
Related terms
Take profit
An order that closes a trade at a set price to lock in profit.…
Trailing stop
A stop loss that follows price by a set distance as the trade…
Risk per trade
The share of your account you lose if a trade hits its stop loss.…
Forex signal
A trade idea with a pair, direction, entry, stop loss and…
Breakeven
Moving the stop loss to the entry price so the trade can no longer…
Buy limit
A pending order to buy below the current price, used to enter on a…
Learn more
- What is forex trading? A plain-English guide
- Lot sizes explained: standard, mini, micro and nano lots
- How to read a forex signal (and act on it safely)
- Forex risk management: the rules that keep you trading
- Leverage and margin in forex, explained simply
- How to spot forex signal scams on Telegram and social media
- Are forex signals legit, legal and worth it?
- What Is Copy Trading? How It Works in Forex, Costs and Risks
- How to Copy Telegram Signals to MT4 and MT5 Automatically (2026)