How to Use Stop Loss Orders

A stop loss order closes your trade automatically when price hits a level you choose. It limits your loss so one bad trade doesn't damage your account. You should set it before or as soon as you enter the trade.

Place the stop where your idea is wrong—e.g. below support for a long—not too tight (or you'll get stopped out by noise) and not too wide (or your risk per trade becomes too large). Then respect it; don't remove it when price goes against you.