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Traders101.com reproduces this definition here under license for your convenience.

A stop loss (or a 'stop loss order') is used when trading to try and limit the potential loss should your position deteriorate. If you don't use stop losses while trading, you won't be trading for long, as catastrophic events that can wipe out a 'naked' position occur with saddening regularity. A stop loss is essentially a trading "insurance policy" to limit the downside, should a trader "get it wrong". Beginning traders should ALWAYS use a real physical stop - only advanced traders should even consider 'mental' stops (i.e. making a mental note to stop a trade at a certain price). Where to place a stop is generally regarded as the most difficult lesson to learn in trading.