Account
New to ADSS? Open an
account now to get started.
Already have an account?
Add funds to your ADSS account
Account
New to ADSS? Open an
account now to get started.
Add funds to your ADSS account
A stop loss order is a type of trade instruction that includes a provision to automatically exit the trade if it moves against the trader by more than a set amount. Using a stop loss is a fundamental risk management technique that should be used wherever possible. Traders can use stop loss orders when trading stocks, commodities, currencies, and more.
If a trader buys a stock at $10 expecting the price to rise to $14, they may well place a stop loss at 8$. This means that if their trade rationale fails, they will minimise their losses to the level of the stop loss. Typically traders aim to have their take profit level – the level at which the trade is automatically exited as a success – at two times the difference between the entry price and stop loss. This is a common risk management technique that means the trader need only be correct 50% of the time for the strategy to remain profitable.
There are multiple ways a trader might decide to place their stop loss. As well as maintaining a 2X risk / reward ratio, traders might use graphical stops, where they observe likely support and resistance levels using technical analysis, and use these to place stops. The main requirement is for a stop loss that will exit the trade should an opposite trend to the one you expect take hold. Each of the various methods to choose a level has its advantages and drawbacks, and much of the skill of trading is knowing when and how to place them.
ADSS offers a range of global markets for traders, with opportunities in indices, commodities, forex, equities and more. We also feature tutorials, how-to guides, and weekly webinars to help you navigate the financial markets and find better trading opportunities. You can start trading and investing online by opening a live trading or demo trading account.
See all glossary trading terms
ADSS
8th floor, CI Tower
Corniche Road
PO Box 93894
Abu Dhabi
United Arab Emirates
Trading Services
ts@adss.com
+971 2 657 2414
Investing in CFDs involves a high degree of risk that you will lose your money due to the use of leverage, particularly in fast moving markets, where a relatively small movement in the price can lead to a proportionately larger movement in the value of your investment. This can result in loses that exceed the funds in your account. You should consider whether you understand how CFDs work and you should seek independent advice if necessary.
ADS Securities LLC (“ADSS”) is authorised and regulated by the Securities and Commodities Authority (“SCA”) in the United Arab Emirates as a trading broker for Over the Counter (“OTC”) Derivatives contracts and foreign exchange spot markets. ADSS is a limited liability company incorporated under United Arab Emirates law. The company is registered with the Department of Economic Development of Abu Dhabi (No. 1190047) and has its principal place of business at 8th Floor, CI Tower, Corniche Road, P.O. Box 93894, Abu Dhabi, United Arab Emirates.
The information presented is not directed at residents of any particular country outside the United Arab Emirates and is not intended for distribution to, or use by, any person in any country where the distribution or use is contrary to local law or regulation.
ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.
