---
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/glossary/stop-loss"
last_updated: "2026-10-03"
md_url: "https://fincanva.com/glossary/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.

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

## How does Fincanva handle it?

On a strategy's Settings page, the Exits key among the strategy rules shows the stop loss beside the take profit, the loss as a negative percentage.

- 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.
- A position closed by this rule is recorded with the [exit reason](/glossary/exit-reason) **Stop loss**.

## 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. It looks neither at how long the position has been held, which is [max hold](/glossary/max-hold-months), nor at a gain: where [take profit](/glossary/take-profit) caps the upside, stop loss caps the downside. The loss is counted from the price the position was **first** opened at and keeps counting through every [rebalance](/glossary/rebalance) that keeps the position, exactly as for [take profit](/glossary/take-profit#how-does-take-profit-decide-when-to-close).

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. It closes on the first bar that reaches the threshold — at the threshold level itself, or at that bar's open when the bar opens already past it, which is how a stop-out can book a loss larger than the threshold after a gap. [Execution time](/glossary/execution-time#when-does-a-modelled-trade-fill-within-a-bar) has the full fill rule.

## What if one bar reaches both the stop-loss and the take-profit level?

Only one of them closes the position, and the bar decides which. If the bar **opens** already past one of the two levels, that one wins. Otherwise a daily bar does not say which extreme came first, so Fincanva follows one fixed convention: a bar that closed **at or above** its open is taken to have reached its low first, and a bar that closed **below** its open its high first. For a long position that means a stop-out on a rising bar and a take profit on a falling one; for a short position it is the other way round.

## Can a stopped-out instrument be bought again?

Yes, but never on the bar that closed it. New positions are opened when the [strategy](/glossary/strategy) rebalances, and at no other time, so the earliest the same [instrument](/glossary/instrument) can come back is a later rebalance at which the strategy's rules select it again. If you set a [reinvest delay](/glossary/reinvest-delay), the instrument stays out of the strategy's choices until that delay has passed, counted from the day of the stop-out. Until that rebalance the capital the stop-out freed stays in cash; what happens at the rebalance itself — and the two alerts that say so — is in [position exits](/docs/strategies/position-exits#what-happens-after-a-stop-loss-or-take-profit-closes-a-position).

## What does it look like in practice?

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.*

Fincanva is for education and illustration only. It is not personalised financial advice, and past or simulated results do not predict future ones. [Read the Terms Addendum](https://fincanva.com/terms/addendum#section-3)