Also known as: Protective Stop, Stop Order, SL Order, Stop-Loss Order
A stop loss is an order left with a broker to close a position automatically once the price hits a preset level, capping the loss on that trade. It converts to a market order the instant the trigger price trades, so exit is fast but not price-guaranteed.
Stop losses come in two main flavors. A standard stop becomes a market order when triggered, meaning it can fill worse than the level you set if the market gaps or moves fast — this is slippage. A Guaranteed Stop Loss Order (GSLO) fills at exactly your level no matter what, but the broker charges a small premium (often a fraction of a pip, or a fee refunded if the stop is not hit).
Traders size stops using a risk-per-trade rule rather than a gut feeling. A common convention is the 1% rule: risk no more than 1% of account equity on any single position. On a $10,000 account that is $100 of risk. If the trade needs a 50-pip stop on EUR/USD, and each pip on a mini lot (0.1 lot) is worth about $1, the trader can hold roughly two mini lots (0.2 lot) and stay inside the $100 budget.
On MetaTrader 4 and MetaTrader 5 the stop-loss field sits directly in the order ticket, and it can be modified or trailed after entry. Because the level lives on the broker's server, it still executes even if the trader's terminal is closed or their internet drops — the key reason server-side stops beat manual monitoring.
You attach a stop price to a position when you open it or afterwards. The broker's server watches the market feed continuously. The moment the market trades at (or through) your stop level, the server converts the stop into a market order and closes the position at the next available price.
With a standard stop, that next available price can differ from your level in fast or gapping markets, producing slippage — you might set a stop at 1.0850 but fill at 1.0847. A guaranteed stop removes that risk: the broker honors your exact level and absorbs the slippage in exchange for a premium. Trailing stops add a dynamic element, moving the stop in your favor by a fixed distance as price advances and locking in gains, but never moving backwards.
Decide the maximum you will lose on the trade, typically 1–2% of account equity.
Place the stop where your trade idea is invalidated — below support for a long, above resistance for a short — not at a round number.
Divide your dollar risk by the pip distance and pip value to get the correct lot size.
Type the level into the SL field so it lives server-side, not as a manual mental note.
Move the stop to breakeven or trail it as the trade moves in your favor to protect profit.
Why it matters for partnership: Clients who use stops survive drawdowns and keep generating rebates for years; blown accounts stop paying. Teaching disciplined stop-loss use is one of the highest-ROI retention moves an IB can make.
An affiliate markets a copy-trading master account on IC Markets that publicly enforces a 1% stop loss per trade. On a $50,000 master account that caps each loss near $500. Conservative investors cite that rule as the reason they subscribe, and the affiliate reports higher average deposits from followers versus an unmanaged strategy they ran earlier.
| Feature | Standard Stop | Guaranteed Stop (GSLO) |
|---|---|---|
| Fill price | Next market price — can slip | Exactly your level, always |
| Cost | Free | Premium or wider spread |
| Gap/news protection | No | Yes |
| Best for | Normal conditions | Volatile assets, weekend gaps |
Feature brokers that offer Guaranteed Stop Loss Orders when marketing to risk-averse beginners — the exact-fill promise is a strong, honest reassurance angle.
Relying on “stealth” EA-based stops held on the trader's own machine instead of server-side stops — a dropped connection can leave a losing position wide open and wipe the account.
At the price that proves your trade idea wrong — below a support level for a long, above resistance for a short — then size the position so the distance costs no more than 1–2% of your equity.
A standard stop can fill worse than your level during gaps or fast news, called slippage. A Guaranteed Stop Loss Order removes that risk for a premium.
Yes, if it is set on the order ticket it lives on the broker's server and executes independently of your terminal or internet connection.
You choose and place a stop loss on a single trade. A stop out is the broker force-closing your positions when your whole account's margin level falls too low.
A trailing stop locks in profit by following price at a set distance, which suits trending markets, but it can exit early on normal pullbacks; neither is universally better.
Standard stops are free. Guaranteed stops carry a premium or a slightly wider spread, sometimes refunded if the stop is never triggered.