A stop-loss order that is kept in a trader’s head instead of placing a stop-loss order with a broker. Stop-loss orders placed with your broker are public information. Traders often get ‘stopped out’ of positions before the stock moves in the direction they expected. Professional traders are trained to hit nearby stop-loss orders.

• It is important for traders to set and adhere to mental stop-losses.
• Never change a mental stop-loss mid-trade.
• Never enter a position without a mental stop-loss.
• Setting a mental stop-loss seems easy, but following through is very difficult for most beginner traders. This is one of the most important disciplines to master for long-term trading success.