Stop Order Definition Types Usage in Modern Trading

1899 reads · Last updated: January 12, 2026

A Stop Order is a type of trading order used to automatically execute a buy or sell operation when the market price reaches a preset level. There are two types of stop orders:Stop Buy Order: This order is executed automatically when the market price rises to the preset trigger price. It is commonly used to buy when the price breaks through a certain level, preventing missing out on further upward movement.Stop Sell Order: This order is executed automatically when the market price falls to the preset trigger price. It is typically used to limit losses or protect existing profits.

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