A stop loss is basically the point where a trader will dump their stock (most traders don't even maintain stop-loss orders since they are often times hunted by

A stop loss is basically the point where a trader will dump their stock (most traders don't even maintain stop-loss orders since they are often times hunted by more sophisticated players.) It is a clear marker where the trader is wrong & the trader will recognize the loss, preserve capital, & wait for the next setup. So if the stop is @ $10 & the only offer is not until $9.75, a trader should take the loss @ $9.75 in order to avoid an even deeper loss. A stop loss is merely one mechanism in a traders risk management strategy. [Minor edits]