Stop Loss Order

A stop loss order is a protective order that sits inactive until price trades at or through a specified trigger level, at which point it activates and attempts to exit the position. The two common forms are a stop-market order, which becomes a market order once triggered, and a stop-limit order, which becomes a limit order at a specified price once triggered.

The difference between the two matters in practice: a stop-market is highly likely to fill once triggered, but the fill price can be worse than the trigger price in a fast market. A stop-limit locks in the price (or better) but may not fill at all if price gaps past the limit without trading through it.

Futures contracts are leveraged, so an open position without a working stop has no defined ceiling on the loss — a stop loss order is the mechanical answer to that risk, converting an open-ended exposure into a bounded one. This is also the honest caveat traders need: a stop-market can still fill worse than its trigger during a gap or a thin, fast-moving tick (a limit-down open, a surprise headline print), because the order only ensures the exit triggers, not the exact fill price.

For prop firm accounts, a working stop is usually what stands between a bad trade and a daily-loss-limit breach — it's the difference between a single defined loss and an account getting flattened and locked by the firm's own risk rules.

Stop loss orders copy to followers as the stop leg of a replicated bracket — MimikTrader detects the leader's stop order alongside its paired take profit and replicates both to each follower, sized to that follower's own quantity.