A stop order, or 'stop-loss' order, is an order to buy or sell an asset once the price of the asset reaches a specified price, known as the stop price. When the stop price is reached, a stop order becomes a market order. A buy stop order is entered at a stop price above the current market price.
Stop orders can be used to manage markets moving against you. For example, if you were to set a stop order to sell BTC at a minimum price of 40,469, it will automatically be sold at market price once the price of BTC reaches 40,469.
It is possible to combine limit and stop orders, to automatically place a limit order when the stop price is reached.
In Coinmetro's Margin Platform, you can set a stop price for your positions, which will automatically close your positions at market price, if the latest traded price reaches the stop price.
Coinmetro’s Demo Platform is always available if you would like to practice without risk. Please note that this article is not to be seen as trading or financial advice. It is for educational purposes only.