📖 Financial Lexicon Term
What is Stop Order?
A pending order to buy above the current market price or sell below the current market price.
Detailed Explanation
Stop orders are breakout orders. They assume that if a price breaks through a key resistance or support level, the momentum will carry it further. A Buy Stop is placed above resistance; a Sell Stop is placed below support.
💡 Practical Trading Example
Price is ranging at 1.1000. You place a Buy Stop at 1.1020, expecting a massive breakout.