A stop-loss order is an order placed with a broker to buy or sell once the stock reaches a certain price.
A stop-loss is designed to limit an investor’s loss on a security position.
Setting a stop-loss order for 10% below the price at which you bought the stock will limit your loss to 10%
The advantage of a stop-loss order is you don’t have to monitor how a stock is performing daily.
This convenience is especially handy when you are on vacation or in a situation that prevents you from watching your stocks for an extended period.