In short
- US SEC staff say the stop price is a trigger, not a promised selling price (updated 18 August 2026)1.
- Kraken says that in crypto, a stop-loss is likely to sell far from its stop price (updated 6 October 2026)2.
- As of 31 October 2026, a stop on Binance Futures can watch the Last Price or the Mark Price3.
- Binance Academy says there is no single right way to place a stop-loss (updated 28 April 2026)10.
How does a stop-loss order work?
A stop-loss is a sell order that waits on the exchange, with a stop price below the current price. When the price falls to it, the order starts. Staff of the US SEC, the securities regulator, describe two basic types for shares1, and crypto exchanges offer the same23:
- Stop-market order, often just called a stop-loss. At the stop price it becomes a market order: it sells at once, at the best price buyers offer14.
- Stop-limit order. At the stop price it becomes a limit order: it sells only at your limit price or better1.
Why did my stop-loss sell lower than my price?
A stop-market order takes the best price buyers offer at that moment, and in a fast drop that price can be far below your stop12. Two things make the gap bigger:
- A jump. The price jumps past your stop in one step, so nobody trades at your stop price.
- Few buyers. In a coin few people trade, there are few offers to buy near the price. So one sale is split across several prices, each lower than the last. Binance Academy says this slippage, the gap between the price you expect and the price you get, can be large in fast markets and in markets with few buyers10.
An example with round numbers. You hold 100 coins, bought at 100 dollars, with a stop-market order at 95. The price drops past 95 in seconds. Now buyers offer to take 20 coins at 94, 30 at 92 and the rest only at 89. Your order sells 20 at 94, 30 at 92 and 50 at 89: about 91 dollars a coin on average. You lose about 9 dollars a coin, not 5.
Why did my stop-loss not sell at all?
Here are five possible causes. Your order history on the exchange can show which one.
- It was a stop-limit, and the price fell past the limit. The limit order found no buyer at your price and waited while the price kept falling. SEC staff give the example of a stop at 3 dollars with a limit at 2.50: it can only sell at 2.50 or better1.
- It watched a different price. SEC staff note that brokers differ: some trigger a stop on the last trade, others on the prices buyers and sellers offer1. On Binance Futures you choose the Last Price (the latest trade) or the Mark Price (an average that Binance works out)34. Binance says a stop-limit triggered by the Mark Price may not sell at all, most of all in fast markets, when the two prices move apart4.
- It was blocked. As of 31 October 2026, Binance Futures lets you switch on Price Protection. When the Last Price and the Mark Price move too far apart, it stops a stop-loss from triggering. Binance says that in a fast market this can block an exit you wanted12.
- It was cancelled with its partner. A stop-loss is often paired with a take-profit, a sell order above the price. Binance calls this pair an OCO order, for “one cancels the other”. When one is triggered, the other is cancelled. And if you cancel one, for example to move your take-profit, the stop-loss is cancelled too6.
- It was never there. The exchange refused the order, or it was never sent.
Stop-market or stop-limit?
Each order type trades one risk for another.
| Order type | When the stop price is reached | The risk |
|---|---|---|
| Stop-market | It becomes a market order and sells at the best price buyers offer14 | It can sell far below the stop price in a fast drop or in a coin few people trade12 |
| Stop-limit | It becomes a limit order and sells only at your limit price or better1 | It may not sell at all if the price falls past the limit14 |
| Trailing stop | Its stop price follows a rising price by a set amount, and stays where it is when the price falls1 | Short swings can set it off1 |
| Stop-loss with a take-profit (OCO) | When one of the two is triggered, the other is cancelled6 | Cancel one, and the other is cancelled too6 |
Why does the price hit my stop and then go back up?
Often because the stop sat where a normal swing could reach it. SEC staff warn that a short-term move during the day can trigger a stop1.
Many stops also sit in the same places. Binance Academy says many traders place orders at round prices such as 50,000 or 100,000 dollars. Stop-losses typically go just below a support zone, a price area where buyers stepped in before. Such levels are zones, not exact prices, and false breaks happen regularly: the price passes the level, then turns back7. So a stop just under an obvious level can be hit by a short dip.
The Average True Range (ATR) shows how far the price usually moves in one period, such as a day. It is most often the average of the last 14 periods, and it says nothing about direction. Crypto traders use it so that normal daily swings do not set off their stop too early8.
Where should I put my stop-loss?
There is no single right place: it depends on your strategy and the trade10. This is information, not advice. Three common ways:
- A fixed percentage below the price you paid9. Simple, but a coin that swings a lot needs a stop further away, or normal swings will trigger it10.
- A multiple of the normal swing. Traders often place the stop 1.5 or 2 times the ATR below the price they paid8.
- Past a clear level. Just below a support zone, or where the chart would show that the trade idea was wrong710.
Many traders then size the trade from the stop: the further away the stop, the smaller the trade, so one loss costs the same. Binance Academy’s example: with 5,000 dollars, a planned loss of 1% (50 dollars) and a stop 5% below, the trade is 1,000 dollars. With the stop 10% below, it is 500 dollars. A stop can sell lower than its price, so a real loss can be bigger than the plan10.
What does ForecastsPro do with stop-losses?
We make ForecastsPro, a paid app. Its AI proposes buy, sell or hold, and fixed rules written in code decide what is allowed. As of 31 October 2026:
- Paper and Real money. Paper trading: no real money. Live trading: real money from your own account. In both, the app places two sell orders on Binance after every buy: a take-profit above and a stop-loss below (in Paper, on Binance’s test system). When one sells, Binance cancels the other.
- The order type. A stop-market order wherever Binance offers one for that coin. Otherwise a stop-limit, with its limit 0.5% under the stop price, which a fast drop can jump past.
- The distance. Your risk level, your time horizon and how much the coin moves set it. On the Days horizon, the stop-loss is at most 1.2%, 2% or 4% below the price paid, for Low, Medium or High. A calm coin gets a closer one, down to half of that, never under 1%. It is wider on Weeks and Months, up to 20%. By default the take-profit is twice as far. You can set your own under More settings (see the full table).
- If Binance refuses. While trading is on, the app tries again, and the dashboard shows a red “No stop-loss” warning until the stop-loss is placed or the coin is sold.
- No futures. Spot only: no futures, margin or leverage, so no liquidation.
- Manual mode. Each buy comes with both prices, and you set the two orders yourself on your exchange.
Our guide says it plainly: a stop-loss does not guarantee the price, and in a fast market it may not sell at all. You can lose money. See every safeguard and what it cannot do and our Risk Disclosure.
Questions and answers
Is a stop-loss guaranteed?
Why did my stop-loss trigger on a short wick?
A wick is the thin line on a price chart that shows a short move to a high or a low. If the price touched your stop for a moment, the stop triggered: short-term moves can do that1.
What is the 7% rule for a stop-loss?
It comes from stock investing. In a 1999 article for AAII, a US association of individual investors, the stock investor William J. O’Neil wrote: if a stock falls 7% or 8% below your purchase price, sell it11. It was written for shares, not crypto. Binance Academy notes that in crypto, price swings of 5% to 10% in a single day are routine10.
Is a 20% stop-loss too wide?
There is no right number for everyone. A wide stop is hit less often by normal swings, but each loss at the stop is bigger. With the sizing method above, a 20% stop means a trade a quarter the size of one with a 5% stop, for the same planned loss10.
Can a stop-loss stop a liquidation on futures?
How we checked this
We read every source on 31 October 2026, and checked every sentence about ForecastsPro against its code and guide. This article is information, not financial, legal or tax advice.
ForecastsPro is not affiliated with or endorsed by Binance, Kraken or any company named here. Found a mistake? Write to support@forecastspro.com.
Sources
- US Securities and Exchange Commission, Office of Investor Education and Assistance, investor bulletin (staff views), 13 July 2017, updated 18 August 2026. Stop, Stop-Limit, and Trailing Stop Orders. Written for shares. Used for: a stop order becomes a market order and a stop-limit order a limit order, the stop price is a trigger and not a guaranteed price, the price can differ a lot from the stop price, a stop-limit may not sell, the 3 and 2.50 dollar example, last-sale or quoted prices as the trigger, how a trailing stop works, and short-term moves that trigger stops and trailing stops.
- Kraken support, last updated 6 October 2026. Stop loss orders. Used for: a triggered stop-loss sells as a market order, and in crypto markets, which move fast and can have few buyers, the price it sells at is likely to be far from the stop price.
- Binance help, published 23 September 2019, last updated 7 April 2026. Types of Order on Binance Futures. Used for: a stop market order triggers a market order, and a stop can be triggered by the Last Price or the Mark Price.
- Binance blog, 22 February 2023. What Are Stop Orders in Binance Futures? Used for: stop-market and stop-limit orders, the best available price, the choice of trigger price, the Mark Price as an average price, a stop-limit on the Mark Price may not fill, and a stop order may not protect a position from liquidation.
- Binance blog, 21 August 2025. Mark Price vs. Last Price on Binance Futures: What’s the Difference? Used for: the Mark Price triggers liquidation.
- Binance help, published 19 August 2019, last updated 6 January 2026. What Is an OCO (One-Cancels-the-Other) Order and How to Use It? Used for: when one order of the pair is triggered the other is cancelled, and cancelling one cancels the other.
- Binance Academy, updated 28 May 2026. The Basics of Support and Resistance Explained. Used for: orders at round prices, stop-losses just below a support zone, levels as zones, and false breaks.
- Binance Academy, updated 17 April 2026. What Is Average True Range? Used for: what ATR measures, the usual 14 periods, no direction, stops at 1.5 or 2 times the ATR, and its use so that daily swings do not set off a stop too early.
- Binance Academy, updated 25 June 2026. 5 Exit Strategies for Traders. Used for: a stop-loss at a fixed percentage below the entry price.
- Binance Academy, updated 28 April 2026. How to Calculate Position Size in Trading. Used for: no single right way to set a stop, the ways to set the stop, wider stops in more volatile markets, the position size example, what slippage is and that it can be large in fast or thin markets, and daily crypto swings of 5% to 10%.
- AAII Journal, American Association of Individual Investors, William J. O’Neil, September 1999. Sell Rules to Build Your Stock Investing Performance. Written for shares. Used for: the rule to sell a stock that falls 7% or 8% below the purchase price.
- Binance help, published 29 October 2020, last updated 2 January 2026. How to Enable the Futures Price Protection Function? Used for: Price Protection is a setting you can switch on or off, it stops a stop-loss or take-profit from triggering when the Last Price and the Mark Price move too far apart, and in a fast market it can block an exit.
ForecastsPro is an AI crypto trading bot with a hard-coded risk manager. See it work in the live demo: it is free and uses sample data, not real money.