Stop loss orders are one of the most important tools in trading. They allow you to define risk before entering a position, protect capital during volatility and maintain discipline in changing market conditions.

On ThinkTrader, we offer three types of stop loss orders: standard stop loss, trailing stop loss and guaranteed stop loss. Each serves a distinct purpose, giving you the flexibility to manage risk according to your strategy and market environment.

This guide explains how each stop type works and how you can apply them effectively.

Key takeaways

ThinkTrader offers standard stop loss, trailing stop loss and guaranteed stop loss
Each stop type supports a different risk management objective
Standard stop loss provides simple, predefined risk control
Trailing stop loss automatically adjusts your stop level based on market movements
Guaranteed stop loss removes slippage risk during high volatility
All stop types are accessible directly from the order ticket in ThinkTrader

What is a standard stop loss?

A standard stop loss is a predefined price level at which your position automatically closes if the market moves against you.

It remains fixed at the price level you select. Once triggered, the trade closes at the next available market price.

A standard stop loss helps you:

Define your maximum acceptable loss before entering a trade
Maintain discipline during volatile conditions
Protect capital without constant monitoring

It forms the foundation of structured risk management.

What is a trailing stop loss?

A trailing stop loss automatically adjusts as the market moves in your favour.

Instead of remaining fixed, it follows price at a set distance. If price continues to move favourably, the stop level moves with it. If the market reverses, the position closes once the trailing distance is reached. This tool is free to use on ThinkTrader.

This approach allows you to:

Lock in potential gains as trends develop
Limit downside during reversals
Automate trade management

Trailing stops are particularly useful in trending markets where you want to give the trade room to develop while still protecting accumulated gains. This tool is free to use on ThinkTrader.

What is a guaranteed stop loss?

A guaranteed stop loss provides certainty over your maximum risk.

When you use a guaranteed stop loss, your position will close exactly at your chosen price level, regardless of volatility or market gaps. Even during extreme price movements, your stop level is honoured.

This is particularly relevant:

During major economic announcements
In highly volatile markets
When trading instruments prone to gapping

Guaranteed stops involve a small premium from 0.025% on ThinkTrader, but they eliminate slippage risk and provide full control over worst-case exposure.

The benefits of using stop loss orders

Defined risk exposure: All stop types allow you to determine your risk before entering a trade. This structure supports long-term consistency and capital preservation.

Improved trading efficiency: Automation reduces the need to constantly adjust positions manually, allowing you to focus on analysis and strategy development.

Reduced emotional decision-making: Setting exit levels in advance helps remove impulsive reactions to short-term price movements.

The right one for you, depends on your goals and preferences:

Standard stop loss suits structured setups
Trailing stop loss supports trend-following strategies
Guaranteed stop loss provides certainty in volatile conditions

This flexibility ensures your risk management approach can adapt to different market environments.

A comparison of all three stop-loss tools

Feature	Standard stop loss	Trailing stop loss	Guaranteed stop loss
Stop level type	Fixed price level set by trader	Dynamic level that follows price at a defined distance	Fixed price level set by trader
Adjusts automatically	No	Yes, only when price moves favourably	No
Locks in gains	No	Yes, as price advances	No
Protects against slippage	No	No	Yes
Protection during market gaps	No	No	Yes
Best suited for	Structured risk setups in normal conditions	Trending markets where profits may expand	High-impact news, volatile markets, overnight exposure
Premium cost	No	No	From 0.025%
Risk certainty	Subject to market execution	Subject to market execution	Fully guaranteed execution at chosen level

How to use stop loss orders on ThinkTrader

Setting up stop loss orders on ThinkTrader is straightforward. After selecting your instrument and opening the order ticket, you can choose your preferred stop loss type directly within the trade setup screen. Available options are clearly displayed, allowing you to configure risk before execution.

Log in to the ThinkTrader platform on web or app
Open the order ticket and choose your position size.
Add a stop loss to your trade.
Choose between standard, trailing or guaranteed.
Confirm your order.

Combining stop loss orders with ThinkTrader's advanced tools

ThinkTrader provides you with a whole host of advanced tools and features that can help give you an edge in today's fast-moving markets. Along with stop loss tools, you can enjoy access to the following:

Advanced charting tools, powered by TradingView, include indicators such as Moving Averages, RSI, MACD and Bollinger Bands. These tools help identify trends, support and resistance levels, and potential reversal zones. Aligning stop placement with technical levels can improve risk precision.

Real-time alerts notify you of significant price movements or key levels, helping you reassess exposure when market conditions change.

Signal Centre delivers AI-enhanced trading signals that can complement your risk management strategy by highlighting high-probability setups.

Traders' Gym allows you to backtest strategies using historical market data, enabling you to refine stop placement techniques without risking capital.

Together, these tools allow you to manage risk effectively, even during volatile market conditions and ensuring you can focus on maximising your trading performance.

Final thoughts

Stop loss orders are essential tools for protecting capital and maintaining consistency in your trading. Whether you choose a Standard Stop Loss for simplicity, a Trailing Stop Loss for automated protection, or a Guaranteed Stop Loss for certainty during volatility, ThinkTrader provides the flexibility to align risk management with your strategy.

Ready to get started? Log in to ThinkTrader today and explore the full range of stop loss options on ThinkTrader. Don't have an account? Create one here and join thousands of global traders who use ThinkMarkets as their go-to broker.

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A complete guide to stop loss orders on ThinkTrader