Definition
What is Stop loss?
A stop loss is an order attached to a trade that closes it automatically at a chosen price, so the maximum loss is known before the trade is opened.
A stop loss defines where your trade idea is wrong. Placing it first, and only then choosing the position size, is what keeps every loss to a planned amount.
Good stops sit at a technical level that invalidates the setup, such as beyond a swing high or low, not at an arbitrary round number of pips.
A stop is not a guarantee of price: in fast markets or across gaps it can fill worse than its level (slippage). Moving a stop further away to avoid a loss defeats its purpose.
Example
Example: you buy gold at $2,400.00 with a stop at $2,395.00. With 0.20 lot (20 ounces), a $5 move costs $100, which is 1% of a $10,000 account.
At a prop firm
At Axora Funded floating losses count towards the daily and maximum loss limits, so a stop on every trade is the simplest protection. Elite accounts require a stop loss risking no more than 1% of the initial balance.
Frequently asked questions
Is a stop loss mandatory at Axora Funded?
It is mandatory on Elite accounts; on other programmes it is strongly recommended.
Can I move my stop loss during news?
On Axora Funded paid accounts covered by the news rule, stop changes are blocked from 30 minutes before to 30 minutes after a high-impact release.