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Stop loss orders & risk management at Trade Nation for CFDs

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Adam N.
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2w ago
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Does Trade Nation have a stop loss order for CFDs as of February 2024?

Good news! Trade Nation provides stop loss orders for CFDs, giving traders a crucial tool for managing their risks.

  • Stop loss orders serve to minimize potential losses and safeguard invested capital by automatically closing positions at a pre-set price.
  • Given the leverage and volatility inherent in CFDs, stop loss orders play a crucial role in managing risk effectively.
  • By using stop loss orders, traders can control their positions even in situations where they are not actively monitoring the markets.

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84% of retail CFD accounts lose money

Stop loss order availability
🌐 Web stop loss order
Yes Yes Yes
📱 Mobile stop loss order
Yes Yes Yes
💻 Desktop stop loss order
Yes Yes No

Data updated on February 5, 2024

BrokerChooser score
3.8 3.8 /5
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84% of retail CFD accounts lose money

What order types are available at Trade Nation?

Trade Nation offers various different order types on its web, desktop and mobile platforms. See what order types user can choose from in the table below:

Order types at Trade Nation
Platform Order types
🌐 Web Market, Limit, Stop-loss, Stop limit, Trailing stop, Guaranteed Stop Loss
📱 Mobile Market, Limit, Stop
💻 Desktop Market, Limit, Stop, Trailing Stop

Data updated on February 5, 2024

What is a stop loss order?

A stop loss order is a risk management tool used by traders across various financial markets, such as for CFDs (Contract for Difference). It instructs a broker or trading platform to automatically close a position when the asset price reaches a specified level, called the stop price.

For instance, suppose you purchase CFDs of Company Z at $100 per share and set a stop loss order at $90. If the stock price falls to $90 or below, the stop loss order activates, prompting your broker to sell your CFDs at the current market price. This mechanism helps limit potential losses and safeguard your invested capital.

The primary goal of this order is to minimize potential losses by triggering an automatic exit from a trade when the market moves against the trader's position. When a stop loss order is placed, it acts as a safety measure, shielding traders from substantial losses in case the market does not favor their position. It is important to note, however, that stop loss orders do not guarantee execution at the precise stop price. In fast-moving or highly volatile markets, the execution price may differ, which is known as slippage. Nevertheless, there is an order type that can protect against slippage, which we will explain later in this article.

Furthermore, it is crucial to recognize that stop loss orders are not impervious to market gaps, where the price might leap from one level to another without trading at the stop price. These factors should be taken into account when incorporating stop loss orders into a comprehensive risk management strategy.

If you want to read more about how to use stop loss orders, read our article on stop loss order types at Trade Nation.

Why is stop loss order particularly important with CFDs?

Stop loss orders are particularly important with CFDs (Contract for Difference) due to several reasons:

  1. Leverage: CFDs give traders the ability to enter markets with leverage, enabling them to trade larger positions relative to their initial capital. While leverage amplifies potential profits, it also increases the risk of substantial losses. Stop loss orders aid in managing the heightened risk associated with leverage by automatically closing positions if the market moves unfavorably, thereby limiting losses and safeguarding capital.
  2. Volatility: CFD markets exhibit high volatility, characterized by rapid price fluctuations. Volatility heightens the risk of significant and sudden losses. Through the use of stop loss orders, traders can specify their predetermined maximum acceptable loss and exit a trade if the market moves against their position. This approach mitigates the impact of volatile price swings.
  3. 24/7 market availability: CFD markets operate continuously, enabling traders to engage in various global markets at any given time. However, this constant availability may hinder traders' ability to continuously monitor their positions. Stop loss orders function as an automated risk management tool, empowering traders to retain control over their CFD positions even when they are not actively monitoring the markets.
  4. Diversification: CFDs provide access to a wide array of assets, including stocks, indices, commodities, and cryptocurrencies. Managing a diversified portfolio of CFD positions can be difficult, and stop loss orders help in simplifying risk management. Traders can set individual stop levels for each position, tailoring their risk protection strategy to each specific asset.

Overall, stop loss orders are crucial in CFD trading as they provide a disciplined approach to risk management. If you are interested in learning more about CFDs, check out this comprehensive article explaining all aspects of trading CFDs.

What is a guaranteed stop loss order and is it available at Trade Nation?

A guaranteed stop loss order (GSLO) is a type of stop loss order that guarantees that the order will be executed at the precise price specified, no matter what market conditions are or if there is a price gap. This arms traders with an extra level of protection, especially at times of high market volatility or when highly impactful news events occur.

At Trade Nation, guaranteed stop loss is also available for clients, providing an even better risk management option.
Guaranteed stop loss order availability
🌐 Web guaranteed stop loss order
Yes No Yes
📱 Mobile guaranteed stop loss order
No No Yes
💻 Desktop guaranteed stop loss order
No No No

Data updated on February 5, 2024

BrokerChooser score
3.8 3.8 /5
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84% of retail CFD accounts lose money

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Further reading

Author of this article

Adam Nasli

Financial Wizard | Trading • Safety • Market Analysis

I bring extensive financial expertise as one of BrokerChooser's earliest team members. Personally, I tested nearly all 100+ brokers on our site, opening real-money accounts, executing trades, assessing customer services, and providing firsthand assessment. My professional background includes roles in the banking sector and a degree from Central European University, where I teach finance. My passions lies in in-depth research of the financial industry, building trading algorithms, and managing long-term investments.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology.

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