Stop Order

A stop order becomes a market order once the price reaches a specified trigger level, typically used to enter a breakout trade (a buy stop placed above resistance) or to exit a losing position (as in a stop-loss). Because it converts to a market order on trigger, it can suffer slippage in fast conditions, just like any other market order. This is distinct from a limit order: a stop order is placed anticipating the price will continue in the same direction once it reaches the trigger, while a limit order anticipates a reversal at that level.