Stop-Loss

A stop-loss defines, before entry, the price at which you admit the trade is wrong. For a long, the stop sits below entry; when price trades down through it, the position is closed at market.

Why it's non-negotiable in systematic trading

The stop distance is an input to correct position sizing. Risking 1% of equity per trade only means something if the exit-on-wrong is defined; without a stop, risk is undefined and the sizing formula has nothing to work with.

Placement

Good stops sit where the trade's premise is invalidated, not at a round-number pain threshold. That usually means below the swing low that justified the entry, or a multiple of ATR so the stop breathes with current volatility:

long stop = entry − k × ATR      (k commonly 1.5–3)

Execution reality

A stop is a trigger, not a guarantee of price. Once touched it becomes a market order. AlphaProve's engine models this by filling triggered stops at the next 1-minute open with extra slippage, because gaps through your stop cost real money, in live trading and in honest backtests alike.

On AlphaProve

In the no-code builder the stop-loss field takes an ATR multiple, a percent, or a fixed price, turning the placement rules above into one setting instead of hand-written code. When a stop and a take-profit could both trigger inside the same bar, the OCO bracket resolves stop-first by default. The tearsheet's exit-reason breakdown then counts how many trades closed via SL versus TP or FLIP, showing whether your stop or your target is doing the work.