Risk management tips: A stop-loss price does not guarantee execution
Once triggered, a stop-market order is executed based on market liquidity, and may experience slippage during sharp volatility. A stop-limit order can constrain the execution price, but may not be filled if the market moves past the limit price.
Neither is inherently safer; each carries different risks. Before opening a position, check the trigger basis, order type, and order book depth. Don’t treat your planned stop-loss amount as a guarantee of your maximum loss.
My rule: Leave room in your position sizing for unexpected executions, and don’t rely on a single stop-loss order to bear all the risk. For risk education only. #RiskManagement
Once triggered, a stop-market order is executed based on market liquidity, and may experience slippage during sharp volatility. A stop-limit order can constrain the execution price, but may not be filled if the market moves past the limit price.
Neither is inherently safer; each carries different risks. Before opening a position, check the trigger basis, order type, and order book depth. Don’t treat your planned stop-loss amount as a guarantee of your maximum loss.
My rule: Leave room in your position sizing for unexpected executions, and don’t rely on a single stop-loss order to bear all the risk. For risk education only. #RiskManagement