Questions » What is a stop-loss order?

What is a stop-loss order?

A stop-loss order is an order placed by a trader to sell a cryptocurrency asset automatically when its price falls to a certain level. The purpose of a stop-loss order is to limit the trader’s potential loss on a trade in case the market moves against them. When a stop-loss order is triggered, the trader’s position is automatically closed, and the cryptocurrency asset is sold at the best available price. Stop-loss orders are typically set below the entry price of a trade, but they can also be used to lock in profits by setting the order at or above the entry price.