Sell Stop

A sell stop is the bearish mirror of the buy stop. It's a stop order placed below the current market price, used to enter SHORT positions on breakdowns. When price drops to the trigger, the order converts to a market sell and fills at the next available bid. Sell stops are critical for breakdown trading. You don't want to short BEFORE support breaks (you'd be guessing); you want to short AFTER it breaks (the breakdown itself is your confirmation). Setting the sell stop a few pips below support means the market does the entry work for you. Like buy stops, sell stops are vulnerable to slippage during news. Use sell stop-limits for news-driven setups to cap your slippage risk.