The Purpose of Stop Loss Orders and Execution Risk > Market briefings

[Category] Risk Management
[Original publication date] 2026-05-07

The stop loss order is explained as a tool that controls the range of loss by attempting to close a position at a predetermined price, and the fixed and trailing types are compared. You also need to check that in fast-moving markets the trigger price and the actual execution price can differ.

Key points to check
- The stop loss level reflects both the acceptable loss and the invalidation criteria of the trade hypothesis.
- A trailing stop loss follows the price, but it can be closed out early by volatility.
- In gap and low liquidity situations, the loss amount can end up larger than planned.

Original article
Stop-Loss Order: Purpose, Types, and Role in Risk Management
https://www.infinox.com/global/en/what-is-stop-loss-order/

This article is educational content independently summarized from official INFINOX public materials. It is not investment advice, a personal recommendation, or a guarantee of profit, and for actual product terms please check the official documents at the time of use.