Stop loss

UPDATED 2026-07-25

01 · Build

02 · Prove

03 · Hold

Foundations

Stop loss is an automatic exit that closes a position once its loss reaches a threshold you set, such as a 10% loss, capping how far the position can fall before it is sold. It is the loss-side exit: it acts on one position at a time and looks only at how far that position is down — not at how long it has been held, which is max hold, and not at a gain, which is take profit.

Also seen as: loss limit, SL.

How does stop loss decide when to close?

Stop loss closes a position once its loss reaches the threshold you set. The threshold is entered as a negative percentage (e.g. −10%) because it describes a loss, so a value closer to −100% keeps a position open longer, while one closer to −5% closes it sooner. Where take profit caps the upside, stop loss caps the downside.

Defaults in Fincanva

Off by default; the threshold is entered as a negative percentage (e.g. −10%), and when enabled it starts at −30%.
Adjustable across a range of −100% to −5%, shown as a percentage (suffix "%").
It sits on the Position exits card, described there as "Auto-close rules applied to each position".
Values outside the band are blocked with a "Stop loss must be between −100% and −5%." validation message.

Worked example

A position is opened at a price of 100 with stop loss set to close at a 10% loss. When the price falls to 90, the position's return is −10%, which reaches the threshold, so the position is sold and the loss is capped at that point. Had stop loss instead been set to a 20% loss, the same position at −10% would remain open and could fall further before the rule closed it.

Fincanva does not recommend a stop-loss level, or whether to use one at all — a backtest shows what a setting would have done on historical data, not what it will do. See Is this financial advice?.

Where this term is used

Generated · 3 pages

The pages that reference this term — so a term page is somewhere you pass through, not somewhere you land and stop.

Position exits: take profit, stop loss, max hold, and reinvest delay

Strategies · The four position-exit controls — Take profit, Stop loss, Max hold, and Reinvest delay — where each one lives, its range, default, and how the toggles work.

Set up a risk condition

Strategies · Set up a risk condition from a strategy's Risk card: start from a template, choose the instrument and indicator, then set the Risk-Off and Risk-On thresholds.

When risk management changes your strategy's behavior

Strategies · Risk conditions trade quick reaction against whipsaw, and defensive mode trades exposure for cash — how Confirmation delay and Auto-rebalance shift the balance.

Also referenced by 6 terms

Data-quality bias Exit reason Max hold months Positions detail drill-down Reinvest delay Take profit

Deep diveIs this financial advice?

Do itPosition exits: take profit, stop loss, max hold, and reinvest delay

CompareTake profit · Max hold months · Exit reason · Rebalance · Max drawdown

← Previous termReinvest delay Next term →Take profit

Fincanva provides no financial advice. Backtests show what would have happened — not what will.

GLOSSARY · 193 TERMS