Glossary
What is Stop Loss?
An automated order that sells your position when the price drops below a specified percentage from your entry price, limiting your downside risk.
A stop loss is a risk management tool that automatically sells your position when the price falls below a certain level. It's designed to limit losses on a trade that moves against you.
How Stop Loss Works
- •You buy a token at a certain price (your entry price)
- •You set a stop loss percentage (e.g., -20%)
- •If the token price drops 20% below your entry, the system automatically sells
- •Your maximum loss on this trade is capped at 20%
Example
- •Entry price: $1.00
- •Stop loss: -25%
- •Trigger price: $0.75
- •If the token drops to $0.75, it's sold automatically
Without a stop loss, the token could drop to $0.10 and you'd lose 90% instead of 25%.
Stop Loss in SOL Wallet Shadow
Every position copied by SOL Wallet Shadow can have a stop loss configured. The position monitor continuously checks prices and triggers sells when the stop loss level is hit.
Best Practices
- •Always use a stop loss — Trading without one means unlimited downside
- •Don't set it too tight — Crypto is volatile; a 5% stop will trigger on normal fluctuations
- •Typical ranges — 15-30% for memecoins, 10-20% for larger tokens
- •Combine with trailing stops — Use both for better protection