📖 Financial Lexicon Term
What is Stop Loss (SL)?
A pending risk-management order that automatically closes a losing position once it reaches a specified price.
Detailed Explanation
A Stop Loss is the ultimate safety net, ensuring a bad trade doesn't wipe out your account. It converts your floating loss into a realized loss at a predetermined mathematical point where your trading thesis is invalidated.
💡 Practical Trading Example
You buy EUR/USD at 1.1000 and set a Stop Loss at 1.0950, risking exactly 50 pips.