This starting point is critical because it is essential at this point for those who will deliver the technology, those who will use that technology, and those who have a stake in the project to reach agreement on its concept and definition. The process is represented in the figure below.
DEFINITION of 'Stop-Loss Order'. An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investorâs loss on a position in a security. Although most investors associate a stop-loss order only with a long position, it can also be used for a short position, in which case the security would be bought if it trades above a defined price.
1 With a trailing stop loss order, say you have a $15 stock. 2  You might establish a trailing stop loss order of 10% instead of a traditional stop loss order at, say, $13.50. 3  If the stock goes up to $20, you will still use the 10% level. 4  This makes your stop loss order effective at $18 (10% below $20). You place a sell trailing stop loss order using a $1 trail value. 2  While the price moves up, the trailing price (stop price) will stay at $1 less than the current price. 3  The stock price reaches $29 and then it starts to drop.