What is a Stop order?

A stop order (also called a stop-loss or stop market order) is an order to buy or sell a cryptocurrency when its price increases past a particular point, thus, ensuring a higher probability of achieving a predetermined entry or exit price, limiting the investor's loss, or locking in his or her profit. Once the price surpasses the predefined entry/exit point, the stop order becomes a market order.

Example:

Let’s assume that you own 250 XRP, for which you have paid $1.3 per 1 XRP. You are expecting BTC to hit $1.8 sometime in the next month, but you do not want to take huge loss if the market turns the other way. You place a stop order at $0.9. If the price goes up, you will realize all of the benefits. If the market goes down an touches $0.9, your order will be automatically executed as a market order to sell your Ripples.

It’s important to note that when the stop order is triggered, it becomes a market order. You will not necessarily receive $0.9 per XRP; you will most likely receive a little more or a little less.

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