Stop Order
A stop order becomes a market order once price reaches your specified trigger price. Buy stops trigger above current price. Sell stops trigger below current price.
Understanding the Concept
Stop orders are primarily used for two purposes: protecting positions (stop losses) and entering breakouts. A sell stop below your entry protects against big losses. A buy stop above resistance lets you catch breakouts you might miss. The key risk: once triggered, it becomes a market order, so slippage can occur—especially during volatile moves or gaps. That's why stop-limit orders exist. Always consider the liquidity at your stop level. If everyone has stops at $40,000, they might all get filled at $39,500.
Real-World Example
You're long Bitcoin at $45,000 with a sell stop at $43,000. If price drops to $43,000, your stop triggers and sells at market price. You take a controlled loss instead of watching it drop further.
How Strykr Helps
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