To limit losses on an open trade, a stop loss automatically closes the position at a price specified in advance. Its placement depends on the direction of the trade: for a long position (a buy trade that gains when the price rises), the stop loss is set below the entry price; for a short position (a sell trade that gains when the price falls), it is set above the entry price. Protecting capital, supporting position sizing and reducing emotion-driven exit decisions during rapid price moves make a stop loss a core risk-management tool in leveraged markets. This is particularly relevant to forex and CFD traders, especially intermediate to advanced retail traders using MetaTrader 4 or MetaTrader 5. From the meaning and mechanics of stop losses to the main order types, this guide covers how to set and place them, their risks and limitations, common mistakes, and frequently asked questions. Although a stop loss helps limit losses and manage risk before a trade begins, particularly when using leverage, it does not eliminate risk: slippage can cause the final exit price to differ from the trigger price.

A margin call is a warning from your broker that your account equity has fallen too low to support your open positions. When a margin call arrives, you need to add funds or reduce positions before the broker starts closing them. Margin calls on CFD and forex accounts come first in this guide, and stock accounts are compared later.