Stop-loss order

Trigger and fill are two events

A stop rests at the broker or the exchange until a trade prints at or through its trigger. At that moment a stop order becomes a market order and fills at whatever the book offers; a stop-limit order becomes a limit order and may not fill at all if price runs past its limit. The distance between trigger and fill is slippage, and it grows with speed and thin depth, which is exactly when stops tend to trigger.

• Stop (market on trigger): certainty of exit, uncertain price.
• Stop limit: certainty of price ceiling, uncertain exit.
• Neither protects against a gap that opens beyond the trigger.

Where orderflow traders put it

A stop placed at a round number of ticks from the entry says nothing about the market. A stop placed beyond the level whose defence justified the trade says: if this level gives way, the idea was wrong. For a long entered on absorption at a low, that is a few ticks below the absorbed prices; for a breakout, below the last high-volume node the move left behind. Expressing each trade's result as a multiple of that stop distance (R) makes trades comparable, which is why a trade without a stop has no R.

Stops in a backtest

Bar-based backtests cannot tell whether the stop or the target was reached first when both lie inside the same bar's range. The engine must state a policy; a conservative one lets the stop win. Reported drawdown from closed trades also understates the dip lived through mid-trade unless ticks were replayed. Both assumptions belong in the record next to the result.

In Senzoukria

The order ticket offers the "Stop" and "Stop limit" types with a "Stop price" field, and its "Stop (ticks)" and "Risk ($)" fields suggest a quantity for a given stop width without sending anything. On an open position, "Set stop / target" in the broker account panel or a right-click on the chart ("Buy Stop" / "Sell Stop") places the protective order, shown as the SL pill on the chart; the desk's "Protections" stage counts it as a "Loss-side exit" only when the broker lists it among the working orders. The "Stop filled" voice clip announces its execution. In the backtest report, on a bar that touches both stop and target it is the stop that wins, and the R analysis reports how many trades carried a stop. Indicators such as ATR stop long and Chandelier exit draw reference levels only: they hold no position state and send no broker order.

Common mistakes

• Reading the trigger price as the exit price; the fill is what the book gave.
• Placing the stop at a fixed dollar amount rather than at the level that invalidates the trade.
• Moving the stop further away once price approaches it, which converts a bounded loss into an unbounded one.
• Treating a stop drawn on the chart as protection before the broker has acknowledged it.