It is important to note that your stop loss order is not directly tied to a position (by default not reduce only - unless selected) but is an independent order and if you exit a position in an alternate way the stop loss must also be manually cancelled.

Stop loss orders are available as primary or conditional close orders via Kraken Pro and on the advanced order form on Kraken.com.

When the last traded price touches the stop price, the stop loss order will execute immediately as a market order and will incur taker fees upon execution.

Note that since a market order is created when your stop price is reached, your order may fill at a lower (in case of a sell) or higher (in case of a buy) price than the stop price. For markets with high volatility and relatively low liquidity like cryptocurrency markets, it is likely that your fill price will be significantly lower or higher than your stop price. 

Stop loss: Triggers a market order (buy or sell) when the last traded price* hits the stop price that you specify.
*Index price tigger available on certain pairs. 

Stop price: The price at which the stop loss order triggers, specified by you.

You can specify the sell stop price in two ways:

1. A static price. For example, if the current market price of BTC is $50,000, you can set it to $49,500 to trigger a market sell if the price drops to $49,500.

2. Price offset based on percentage of current market price. For example, if the current market price of BTC is $60,000, using a 10% negative offset from the current market price will trigger a market sell when the price drops to $54,000.

Example: Suppose you purchased 0.08 BTC/USD at $20,500 thinking that the market price will go up. However, you want to limit your possible losses on this purchase so you set the stop price at 20,000 USD. So, if the market price falls to $20,000 your BTC will be sold.

You can specify the buy stop price in two ways:

1. A static price. For example, if the current market price of BTC is $52,500, you can set it to $53,000 to trigger a market buy once the price rises to $53,000.

2. Price offset based on percentage of current market price. For example, if the current market price of BTC is $60,000, a 10% positive offset from the current market price will trigger a market buy when the price rises to $66,000.

Example: Suppose the market price for BTC/USD is $20,500. Your analysis tells you “if the price hits $21,000, it’s going to continue increasing” and you want to place a buy order in advance to take advantage. You could create a buy stop loss at $21,000 to enter the market once the trend begins.