A Stop Loss order is essentially a type of a limit order. A Stop Loss order executes a limit at a relative loss, at the rate set by the trader in advance. A client can chose the stop loss rate for opening or closing a position – increasing or decreasing his exposure. Using a Stop Loss order to open a position (or an exposure) is an order to buy or sell one financial asset against another, at a rate inferior to the currently prevailing market rate. Using a Stop Loss order to close a position or to decrease exposure means giving an order to execute a deal, which is opposite to an existing position/s, thus effectively closing a position.
Stop Loss orders are usually executed at the client-defined rate, except for cases of extreme price volatility during market trading hours (e.g., during dramatic news events), during periods when the trading in a particular instrument is halted, or over the weekend, when the first trading day after the trading halt or weekend starts with significantly different opening rates to the previous market closing rates. Under such circumstances, the order may be executed at the closest possible rate (i.e. market rate during the execution (“at best market” order)). Please note that some less liquid currencies (e.g. TRY) or other instruments (e.g. commodities and indices), which are not traded on a 24 hours basis, may experience market gaps on a daily basis, and are therefore more susceptible to slippage. You should expect more incidents of executing Stop Loss orders at best market rate with these instruments.