Risk Management
Stop Loss
Quick Definition
A predetermined price at which you exit a losing position to limit potential losses.
In Plain English
A stop loss is your escape hatch. Before you enter any trade, you decide: "If I'm wrong, where do I get out?" This removes emotion from the equation.
Example
You buy TSLA at $250 with a stop loss at $237.50 (5% below entry). If the thesis is wrong and price drops, you're automatically out.
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