What is Stop Loss Order?Stop loss order is an order to close position if/when losses reaches a particular point. In other words this is an order by which you can decide the maximum loss that you are ready to accept. Here we are going to discuss only Stop Loss Order regarding Day Trading, but the same principle can be used for Swing Trading or Long Term Trading.Following Example can explain the point.If u have placed a buy order at 100. You need not place a stop loss order till your trade gets executed. Once your trade gets executed, you have to place another order for Stop Loss. Now lets assume that CMP(Current Market Price) is 100.50. Stop Loss Order should be like this Type= Sell Quantity = Quantity you have got (received). Price=99.40 Trigger price =99.50Note: Trigger price is the price at wh maqui berry weight loss ich your order gets triggered (fired). Till then it?s on hold.So in our example If CMP falls from 100.50 to 99.55 nothing will happen but at 99.50 your order (Stop Loss) for sell will get executed at a price of 99.40 so your loss would be limited to 0.60 (100-99.40) only. Additional Points:Percentage Of Stop LossFor day trading stop loss of 1-2% max is recommended. Some traders like me use 0.5% stops, which is what I have explained (100-0.5%*100=99.5). You have to decide the % according to your experience & confidence.If you don?t use stop loss order the price can go down by 5% or even 20% & you won?t be able to do much then, hence for every trade without fail you should use stop loss order.A warning, don?t ever think that just because you have placed stop loss order, you are 100 % safe.
