A type of stop order where the specified price is less than the current market price and the order is to sell.

Usually, the way stop loss orders work is you set a price lower than the current market price. If the market price ever goes below this price, a market order (not a limit order) to sell your shares/commodities/futures/bonds/whatever goes into effect immediately.

The reason behind stop loss orders are to limit your losses in the event of the market turning against you, when you are not watching.

Cut losses quickly, let winners run

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