Stop Loss (SL)
Auto-order to close position at predefined loss level.
Stop Loss: auto-sell at predefined loss level. Without = unlimited risk (especially short). Technical SLs (below support, MA200, swing low) better than arbitrary (10%). Trailing SL follows price up. Risk: stop hunting (whales tank price to clear SLs).
In plain words
An order that automatically closes your position at a defined loss level. You set it at the start of the trade and don't touch it. Without a stop-loss one big loss can wipe your capital, with it, you cap each loss at an acceptable percentage. The single most important risk-management tool.
Example
Long BTC @ $90k, SL @ $87k (-3.3%). Drop to 87k = auto-sell, -3.3% loss. Without SL: could drop to $70k = -22%. Trailing 5%: BTC up to 100k = SL trails to 95k. Drop to 95k = exit with +5.5% vs losing.
Also known as: stop loss, SL