The stop loss, your first line of defence

A stop loss is an order that closes your position when the price reaches a level set in advance. It turns a possible loss into a known one.

Why people move it, and why you should not

• Set the stop when you open the position, never afterwards.
• Never move it further from the entry price.
• Only move it closer to protect a gain already made.

A stop belongs where the idea behind the trade stops being true, not at an arbitrary distance.