Stop-losses in plain English

A stop-loss is a line you draw before a trade: "If the price goes this far against me, get me out." It turns an unknown loss into a small, planned one.

A simple example

You buy gold at 4,000, betting it will rise, at £2 for every point it moves. You set a stop-loss 10 points below, at 3,990.

• If gold rises to 4,020, you're up 20 points: +£40.
• If gold falls instead, the stop closes your trade at 3,990: you lose 10 points, −£20, and no more.
• Without the stop, a big news shock could take gold to 3,900: −£200.

The golden rules

• Decide your stop before you trade, when you're calm.
• Never move it further away to "give the trade more room". That's hope, not a plan.
• Aim to win more than you risk: if your stop is 10 points away, aim for 15 or more.
• Keep each trade small, so no single loss hurts much.

In Hoglet, Hoglet "curls up" when danger comes: that's the stop-loss. In Gold Trader, your discipline score rewards using one every time.

Learn it by playing, with pretend money.

Free games for ages 8 to 18, and parents too. Not betting, not gambling.