Stop Lost

A Stop-Loss order is a way to minimize the loss that a trader already set for that trading. It is a kind of common that given by the trader to the broker in charge to sell or enter a market according to the trader’s will. This Stop-Loss order is a good precautious way to minimize the trader’s loss. For example,

Trading stock: $100

Stop-Loss order: $85

This means that when the price dropped below $85, a trader’s broker would helped you to sell the stock to lock in the profits.

Positives and Negatives
There are advantages and disadvantages for the Stop-Loss order.

The advantage is that a trader don’t have to monitor the market flowing all the time especially when he or she is not free in a way that they don’t have much time to deal with trading market in a long term. The Stop-Loss order would automatically sell or buy according to a trader’s common.

However, this Stop-Loss order could not function well in a short term active market as the trader will keep on losing his commissions since the flowing of an active market is hard to be expected and change rapidly.
 
There are no rules for traders to determine when or what level of price traders could place their Stop-Loss order. It is a free way, letting the traders to making their own decision on how they trade.