A
Stop-Loss
is
an
order
placed
with
a
broker
to
sell
a
stock
when
it
reaches
a
certain
price.
The
stop-loss
is
designed
to
limit
an
investor's
loss
on
a
security
position.
Another
name
for
Stop
Loss
is
"stop
order"
or
"stop-market
order".
Setting
a
stop-loss
order
for
5%
below
the
price
you
paid
for
the
stock
will
limit
your
loss
to
5%.
This
strategy
allows
investors
to
determine
their
loss
limit
in
advance,
preventing
emotional
decision-making.
It's
also
a
great
idea
to
use
a
stop
order
before
you
leave
for
holidays
or
enter
a
situation
in
which
you
will
be
unable
to
watch
your
stocks
for
an
extended
period
of
time.
It's
preferrable
that
maintain
a
'mental
stop
loss'.
In
order
words,
instead
of
showing
your
hands,
you
keep
a
visual
stop
loss
and
once
you
reach
that
percentage,
you
will
close
your
position
yourself.
Stop
Loss
will
not
protect
your
position
after
hours
or
pre-market.