Definition. An order that only activates when price reaches a specified level. Once triggered, it usually becomes a market order.
How it works
A stop order waits outside the book. When the trigger price is reached, it enters the market as a market order. The stop-limit variant turns into a limit order.
Example
When triggered during a fast move, a stop order can fill several points away from the trigger price.
What to watch out for
A stop order doesn't guarantee the fill price (slippage). A stop-limit guarantees the price but not execution. Each trader sets the rules for using them in their plan.
You'll find the full explanation with graphics, examples and exercises in the 🖥️ Order flow atlas space, and its use in the live market in the 🔴 Live Room. Both are available to Club members (in Polish).
