Stop-Loss Order is the method of either selling or buying the stock in future once the stock price reaches a certain price (up or down), targeted to minimise the loss. Once the criteria are set for the sale or purchase of the stock, investors enjoy the freedom from continuously tracking or failing to remember.
Example: ASX: BPT per share is purchased at AUD 3. Now setting the Stop-Loss Order at plus or minus 10% to either sell or buy the stock, respectively, means that if the share price falls below 10% i.e. AUD 2.7, then the share will be sold or if share price increases by 10% i.e. AUD 3.3, then the share automatically can be bought from the market at the prevalent price.
The percentage of setting stop-loss order will limit your losses by the same percentage.