Hi Gunsnroses! For me, a stop loss is an order that closes out your existing trade in order to limit losses. Stop losses are literally used to stop the loss of your trading capital. When your stop loss order is hit on a trade, the trade is closed at the current market value.

Denoting or relating to an order to sell a security or commodity at a specified price in order to limit a loss.

An order to unwind a position when the price moves against you. This order is designed to limit losses or in some cases to lock in a certain level of profit