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Stop Loss
A pre-set order that closes a losing position automatically once price reaches a defined level.
What it is
Stop loss is the single most important tool in trading. It's the line you draw BEFORE the trade where you say: 'if price gets here, I was wrong, get me out.' Without it, a 5% loss can become a 50% loss by the time emotion lets you click sell. Three styles: FIXED (e.g. -2% from entry), TECHNICAL (below a key support level), and ATR-based (1.5×ATR below entry — wider in volatile markets). Pros use ATR-based stops because they adapt to market state. The cardinal rule: the stop is set BEFORE entry, not after the trade starts hurting.
Example
You enter ETH long at $2,100 with a $2,058 stop loss (-2%). ETH drops to $2,055, your stop triggers, you exit with a 2% loss. ETH then drops to $1,920 over the next week — your $42 loss saved you from a $180 loss.
How Indikora uses Stop Loss
Every Indikora signal — both AutoTrader and Trade Plan — includes a hard stop loss. The AutoTrader also enforces a daily-loss cap that auto-pauses the bot if total drawdown crosses your configured limit.
Related terms
- Take Profit — A pre-set order that closes a winning position automatically once price reaches a defined target.
- ATR (Average True Range) — Wilder's 14-period average of true ranges — a pure measure of how volatile an asset has been.