Stop Order
An order that triggers at your level then fills at market: the basis of stops and breakout entries.
A stop order triggers at your level and fills at market. It guarantees execution, never price, which is why gaps slip through stops.
A stop order rests dormant until price touches your trigger level, then fires as a market order. Buy stops sit above price for breakout entries; sell stops sit below for protection. The trigger guarantees action, never price, which is why gaps blow through stops.
How It Works
- Dormant until price touches the trigger
- Fires as a market order on trigger
- Gaps and news slip past the level
Trading Tips
Use stops for protection and breakout entries alike
Expect slippage in fast markets as the design, not a flaw
Combine with limits via stop-limit where exact exits matter
Stop Order Example
Say EUR/USD coils under 1.0900 and you rest a buy stop at 1.0905. The break triggers you at 1.0906 in calm trade, or 1.0915 in a news spike. Same order, different market, different fill.
How Traders Use Stop Order
Place entry stops beyond the level plus a buffer, never on the round number everyone sees. For protection stops, accept the slippage contract consciously or switch to stop-limit where liquidity allows.
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