Guide · Last updated: October 13, 2026

What is a stop loss?

A stop loss is an order that closes your position automatically when price reaches the level you set. It helps limit loss in advance.

How does it work?

When price reaches the trigger, the stop becomes a market or limit order. A stop-market order closes at the market price; with a stop-limit order the position can stay open if your limit isn't filled.

Where to place it?

At the level that shows your idea was wrong. A stop too close gets hit by normal swings; one too far forces a smaller position for the same risk. Using the coin's average daily move (ATR) as a reference is common.

Its limits

In fast markets or gaps a stop can fill worse than its trigger (slippage). The trigger type matters too: last price and mark price can behave differently.

Example

You went long at 100 and set a stop at 95. If price reaches 95 the position closes and you lose about 5%. On a 1,000 USDT position that is roughly 50 USDT.

Where do you see it in KARDVANE?

Trader Coach checks, when you test a plan, whether your stop sits before the liquidation price, whether it is too close relative to the daily move, and your total risk.

FAQ

Does a stop always work?

No. During slippage or sudden moves it can fill at a different price than its trigger; there is no guarantee.

What is a trailing stop?

A stop that follows price as it moves in your favour; it helps protect profit.

This page is educational; it is not investment advice.