Stop Loss
Define where losing trades are cut to protect your account.
The Stop Loss block defines the maximum loss you're willing to accept on a single trade. When price reaches your stop level, the trade is automatically closed to prevent further losses. This is the most important risk management tool in trading — no strategy should run without one.
Why It Matters
Without a stop loss, a single bad trade can erase weeks or months of profits. Stop losses enforce discipline automatically — they close losing trades at your predetermined level regardless of your emotions. This is one of the biggest advantages of automated trading over manual trading.
Settings Explained
Stop Loss Type — How the stop distance is calculated:
- Fixed Pips — A specific number of pips from entry. Simple and predictable. Example: 50 pips below entry for a long trade
- Percentage — A percentage of the entry price. Useful for instruments with very different price levels. Example: 1% below entry
- ATR — Uses the Average True Range to set a dynamic stop that adapts to current volatility. When the market is volatile, the stop is wider. When it's calm, it's tighter. Example: 1.5x ATR
- Indicator Level — Places the stop at a level defined by another indicator, like below an Order Block or beyond a swing point
- Trailing Stop — A stop that moves with price, locking in profit as the trade moves in your favor. The distance between price and the stop stays fixed
Pips — The stop distance in pips. Only used with 'Fixed Pips' type.
Percentage — The stop distance as a percentage. Only used with 'Percentage' type.
ATR Period — The ATR calculation period. Only used with 'ATR' type.
ATR Multiplier — How many ATRs away to place the stop. Only used with 'ATR' type. Common values: 1.0 to 3.0.
Trailing Distance — How far behind price the trailing stop follows. Only used with 'Trailing Stop' type.
Indicator Reference — Which indicator to use for level-based stops. Only used with 'Indicator Level' type.
Level — Which specific level from the indicator to use. Only used with 'Indicator Level' type.
Offset — Additional distance added beyond the indicator level, giving extra breathing room. Prevents getting stopped out by exact-level touches.
Example Use Case
You use an ATR-based stop loss with a 14-period ATR and 1.5x multiplier. In a calm market (ATR = 30 pips), your stop is 45 pips away. In a volatile market (ATR = 80 pips), it widens to 120 pips. Combined with ATR-based position sizing, your dollar risk stays the same regardless of volatility.
ATR-based stops are the gold standard for automated strategies. They adapt to market conditions automatically, preventing you from getting stopped out by normal volatility while still protecting against real adverse moves.
Never trade without a stop loss. Even if you 'plan to watch it' — because you won't always be watching. Automated stops are non-negotiable in responsible trading.