---
title: "Stop loss"
description: "Stop loss closes a position automatically once its loss reaches the threshold you set. Entered as a negative percentage in Fincanva, from −5% down to −100%."
canonical_url: "https://fincanva.com/docs/strategies/stop-loss"
last_updated: "2026-09-17"
md_url: "https://fincanva.com/docs/strategies/stop-loss.md"
---

# Stop loss

Stop loss is an automatic exit that closes a position once its loss reaches a threshold you set, such as a 10% loss, capping how far the position can fall before it is sold. It is the loss-side exit: it acts on one position at a time and looks only at how far that position is down — not at how long it has been held, which is [max hold](/docs/strategies/max-hold-months), and not at a gain, which is [take profit](/docs/strategies/take-profit).

**Also seen as:** loss limit, SL.

## How does stop loss decide when to close?

Stop loss closes a position once its loss reaches the threshold you set. The threshold is entered as a negative percentage (e.g. −10%) because it describes a loss, so a value closer to −100% keeps a position open longer, while one closer to −5% closes it sooner. Where take profit caps the upside, stop loss caps the downside. The check is not tied to the rebalance schedule: the loss is read on the position's own price bars, so a stop loss can close a position between two rebalances — see [execution time](/docs/strategies/execution-time#when-does-a-modelled-trade-fill-within-a-bar) for the price that close books at.

## Defaults in Fincanva

- Off by default; the threshold is entered as a **negative percentage** (e.g. −10%), and when enabled it starts at **−30%**.
- Adjustable across a range of **−100% to −5%**, shown as a percentage (suffix "%").
- It sits on the **Position exits** card, described there as "Auto-close rules applied to each position".
- Values outside the band are blocked with a "Stop loss must be between −100% and −5%." validation message.

## Worked example

A position is opened at a price of 100 with stop loss set to close at a **10% loss**. When the price falls to 90, the position's return is −10%, which reaches the threshold, so the position is sold and the loss is capped at that point. Had stop loss instead been set to a 20% loss, the same position at −10% would remain open and could fall further before the rule closed it.

*Fincanva does not recommend a stop-loss level, or whether to use one at all — a backtest shows what a setting would have done on historical data, not what it will do. See [Is this financial advice?](/docs/investing-theory/is-this-financial-advice#is-this-financial-advice).*