A Stop Loss order is typically used as a closing order to limit your losses or lock in your profits on a long or short position. But they can also be used to open a position (see examples for illustration).
There are four variations of Stop Loss orders, but only one of them is currently available for use.
Stop Loss: Triggers a market order (buy or sell) when the last traded price hits the stop price.
Stop Loss Limit: Triggers a limit order (buy or sell) when the last traded price hits the stop price.
Set the stop price at which you want the limit order to trigger in the "Stop Price" field on the order screen. Set the limit price for the limit order in the "Limit Price" field on the order screen. For a long position, if you make the limit price lower than the stop price, this will increase the chances that the limit order is filled (vice versa for a short position).
Trailing Stop: Triggers a market order (buy or sell) when the last traded price goes against the position by the stop offset amount.
Trailing Stop Limit: Trailing stop limit orders work exactly like trailing stop orders except that a limit order is triggered when the last traded price goes against the position by the stop offset amount.
The limit order is set by another offset (the "limit offset"). For a long trade, the limit (sell) order will trigger when market price falls from a high by the stop offset amount; the limit for the order is calculated as the high minus the limit offset. For a short trade, the limit (buy) order will trigger when market price rises from a low by the stop offset amount; the limit for the order is calculated as the low plus the limit offset. If you make the limit offset larger than the stop offset, this will increase the chances that the limit order gets filled when it is triggered.
Image: the advanced order form showing the currently available advanced order types
Examples: Suppose you buy XBT at $100, but don't want to tolerate a loss of much more than 10%. You could create a stop loss sell order with a stop price of $90. Alternatively, if price is trending up and you want to ride the trend, you might create a trailing stop order with a stop offset of 5%. This order will allow you to ride the trend until price falls by 5%.
You can also use stop orders to open long or short positions. If XBT/USD price is trending up, and you think a 6% fall will signal a reversal to a downtrend that you want to short, you could create a trailing stop sell order with a stop offset of 6% (with leverage since it will be a short position). This will open a short XBT/USD position once price falls 6%. In the reverse situation, where you want to open a long position once price rises by some amount after a downtrend, you could do this by creating a trailing stop buy order.
In the examples above a market order will be triggered, but you could use the limit version of any order to trigger a limit order instead. This could get you a better fill price, but it could also result in a partial fill (or even no fill) for the order.
Image: market buy 1 XBT once the market price is >= 90 EUR