Stops, slippage, and gaps: why real losses run larger

The position sizing lesson sizes a trade so that a stop-out costs about 1R. This lesson is about the word “about.”

Fees

Most venues charge a fee when you enter and again when you exit. Both apply to a losing trade. The site’s position size calculator adds the fee on the entry and on the exit at your stop to the risk per unit, which makes the size slightly smaller.

Slippage

Slippage is the difference between the price you expected and the price you got. Stop orders become market orders when triggered, so in a fast move they can fill well past the stop. Thin markets (few buyers and sellers) make it worse.

Gaps

A gap happens when price jumps from one level to another without trading in between, for example after a major news event or when a market reopens. If price gaps through your stop, you are filled near where trading resumes, which can be far beyond 1R. Crypto trades around the clock, but sudden moves and flash crashes still happen.

Leverage and liquidation

Leverage lets you hold a bigger position than the cash you post. It does not change the loss at your stop, but if the liquidation price sits closer than your stop, the venue can close you out first. With leveraged products, losses can exceed the money you put in.

Planning for it

• Size from the stop plus a cost buffer, not from the stop alone.
• Check the liquidation price is well beyond the stop before entering.
• Check the economic calendar for scheduled events before holding through them.
• Record the real result in R, including slippage. A −1.3R loss is information, not a rounding error.

Sources

• U.S. SEC, Investor.gov, “Stop Order”. Accessed November 6, 2026.
• U.S. CFTC, “Customer Advisory: Understand the Risks of Virtual Currency Trading”: volatile swings and flash crashes; leveraged traders “may lose more than their initial investments.” Accessed November 6, 2026.

Education only, not financial advice.