Placing a stop loss is like creating a robot that will take an action once a price hits a certain level. Your “robot” will be awake 24/6
Say you buy one stock of AAPL at 100 dollars and place a stop-loss at 90 dollars.
If price ever falls below 90 the “robot” will automatically sell you order ensuring that you only loose 10 dollars.
**If they is high volume trading e.g following a scandal, it might take a while for the broker to execute the order so your loss might be 15 instead of 10. Also it is recommended to choose a reputable broker as they have the most robust IT infrastructure so can execute orders quicker and most consistently than smaller or less known companies.
Stop losses are free of charge. However some brokers give the option of a guaranteed stop loss orders for a fee.