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Dunn To PerfectionFoundation

Risk Management · Module 2: Leverage, Margin & Exits · Lesson 3

Stop Losses

Beginner 6 minLesson 7 of 15

Learning objectives

  • Explain stop losses in plain language
  • Understand why it matters to markets
  • Recognise a common misconception

The concept

Predefined exits that cap loss under normal conditions.

Why it matters

They make risk measurable before entry.

How markets interpret it

Gaps and fast markets can cause slippage beyond the stop.

Key takeaways

  • Set stops before entry.
  • Accept small losses.

Knowledge check

A stop's main purpose is to…

Key terms · hover or tap for a definition

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