What is the difference between stop-loss orders and limit orders?

What is the difference between stop-loss orders and limit orders?

Stop-loss orders are designed to limit an investor's loss on a position, while limit orders set a specific price to buy or sell.

Can you give me an example of each?

Sure! A stop-loss order might be set to sell a stock if it drops to $50, while a limit order could be set to buy a stock at $45.

Which one is better for a beginner trader?

It depends on your strategy. Stop-loss orders can help protect against large losses, while limit orders can help you buy or sell at desired prices.

Are there any risks associated with these orders?

Yes, stop-loss orders can trigger during market volatility, potentially selling at a lower price, while limit orders may not execute if the price doesn't reach your limit.