What is a Stop-Loss order?

A stop loss order is an order that sells the asset when its price reaches a predetermined level. This order type is designed to limit losses.

For example, you have purchased a coin at $18. If you want to ensure you won’t lose too much in case its price starts dropping, you can place a stop loss order at $17 per coin. If the coin price drops to $17, your assets will be sold, thus limiting your losses to $1 per one coin. If you do not place a stop loss order and the coin price continues falling, your losses may be much higher than $1 per coin. 

As an option, you may choose not a specific price but a percentage. For example, you can place a stop loss order at 10%. If the coin price drops by 10%, the coins will be sold and thus your losses will be limited to 10%.