Some brokers refuse orders placed too close to market, citing execution risk. A stop level of 3 pips means no stop or limit may sit within 3 pips of the current price. A related freeze level blocks modifying or closing orders when price is within a set distance, which typically applies around news.
These rules matter for scalping and for any strategy placing tight stops. Many ECN-style accounts publish a stop level of zero; others apply restrictions only on certain instruments or during specific hours.
Example: a broker sets a 5-pip stop level on GBP/JPY. A trader wanting a 4-pip stop cannot place it, and must either widen to 5 pips, increasing risk by 25%, or manage the exit manually.
Related: scalping, stop-order, requote, best-execution