Trading & signals glossary
What is a stop loss?
A stop loss is an order that automatically closes a losing trade when price reaches a level you set in advance. It caps how much you can lose: the distance between your entry and your stop is the trade’s risk, what traders call 1R.
How it works
On a long, the stop goes below your entry; on a short, above it. If price touches it, your broker closes the position at the best price available at that moment.
What you lose comes down to two things: the distance to the stop and your position size. That’s why you size the position off the stop, not the other way around.
When price gaps (at the market open or on news), the fill can land a bit past your stop: that’s slippage.
How to calculate it
max loss = |entry − stop| × position size
position size = dollars you want to risk ÷ |entry − stop|
That way every trade risks the same amount, whether the stop is tight or wide.
Example: a gold long risking $50
- Buy gold at 4,200 with a stop at 4,190: the risk is $10 per ounce.
- You want to risk $50: 50 ÷ 10 = 5 ounces (0.05 lots).
- If price drops to 4,190, the order closes on its own: you lose $50, or −1 R.
- Without a stop, there’d be no limit on the loss.
Calculate it
Run the numbers yourself
Free Verpips tools that do this calculation for you.
Our data · Verpips
What we see in signal channels
- 41%
- of measured trades hit the stop
- 2.4%
- of signals come without a stop
- 439
- “stop hit” posts (vs. 24,514 “target hit”)
What they announce
What we measure
of trades end at the stop
Out of 17,345 signals with a direction and a target that we read on Telegram, 423 (2.4%) come without a stop. Of the 3,866 trades we measured against real prices, 41% ended up hitting the stop; even so, the channels posted 439 “stop hit” updates vs. 24,514 “target hit” posts.
Verpips data as of Oct 7, 2026, measured against the real price. See how we measure and the channel directory.
Types and variations
- Fixed stop
- A set price that doesn’t move. It’s what nearly every signal posts.
- Trailing stop
- A stop that follows price at a fixed distance while the trade moves in your favor.
- Breakeven stop
- Moving the stop to your entry after the first target: if price comes back, you’re out flat.
- Mental stop
- A level the trader plans to close at manually, with no order at the broker. It doesn’t protect you if you’re not watching.
Why it matters when choosing a signal channel
Without a stop you can’t know how much a signal risks, measure its result in R, or size the position. A signal with no stop dumps the risk on the follower and makes it impossible to compare the channel with any other.
Common traps
- Posting “SL: VIP only” in the free channel: the signal looks complete, but the risk is unknown.
- Widening the stop after posting, by editing the message, so a loss doesn’t count.
- Very wide stops: a high win rate and huge losses when they fail.
- Announcing every target hit and staying quiet about the stops.
Key takeaways
- ✓A stop caps the loss on a trade: its distance from entry is 1R.
- ✓Position size is calculated from the stop.
- ✓A signal without a stop can’t be measured or managed.
- ✓A channel posting few stops doesn’t mean it hits few.
FAQ: stop loss
Where should you put your stop loss?
Where the trade idea stops being valid (for example, on the other side of support), not where it “hurts less.” Then adjust your position size to risk what you decided to risk.
What does SL mean in a trading signal?
Stop loss: the price at which you close the trade at a loss if the market goes against you.
What happens if price gaps past your stop?
In a gap, the order fills at the first available price, which can be worse than your stop. It’s rare outside of market opens and news.
Is it bad to move your stop?
Moving it further away to avoid taking a loss is: it increases your risk after you’re already in. Moving it closer to lock in profit (trailing or breakeven) is a different kind of trade management.
Channel by channel
See these numbers for each channel, not as an average.
With a free account you see each channel’s result in R, its drawdown, and what it announced versus what actually happened.