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What Is Stop Loss In Share Market, Place Stop Loss Order, What Is Stop Loss Hunting

Hello friends, today I will discuss another important topic –What Is Stop Loss In Share Market, How to Place Stop Loss Order, What Is Stop Loss Hunting Etc.

Stop loss means to decrease your loss or limit your loss. The word stop -loss is most commonly used in the stock market.

In the stock market Stop loss is a too important factor, We Can’t Ignore it. Without Stop loss trading is very risky, you will lose money in a short time.

Most of the traders lost money on trading because they not using Stoploss. So today We will discuss briefly STOPLOSS.

Stoploss Short name is – SL

 

Table content

What Is Stop Loss In Share Market, Place Stop Loss Order, What Is Stop Loss Hunting?

What are the advantages and disadvantages of Stop Loss orders?

How to set up a Stop Loss order

What is trailing stop loss?

How to place a stop-loss order

How to stop hair loss?

Why I use stop-loss?

stop-loss calculator

Stop Loss Hunting

 

 

Why I use Stop-loss?

when you buy any stock, your intention is to make a profit as the Stock Grows, but if that goes in the opposite direction of your analysis, that is, the more the stock fall, the more you will lose, and the loss will be so large that a large percentage of your hard money is lost.

Occasionally there is bad news, or a problem with the politics of the country or any major accident, the impact of which falls on the stock market and suddenly starts to fall fast, in such a situation if you do not use stop-loss you can be a big loss.

 

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An incident happened to me a few months ago, I bought shares of a titan.

250 qty share 940 was my purchase price, I accidentally forgot to put a stop loss, 7 minutes later when I opened the computer I saw the stock went from 940 to 890, that day the titan share was declared result that in a few minutes I suffered a huge loss. That is why it is very important to apply stop loss while working in the Stock Market.

Also below I have given some video links that Stop-loss Related. So View these Videos with the Patient.

Stop-loss Calculator

Different people will tell you different methods for applying stop loss, but if you don’t know the correct method, your stop loss will hit again and again.

Today we will discuss with you some of the popular stop loss fix methods.

Many people say that calculating the percentage stop loss is the correct method. That means the Total Amount should be kept at 2-% as a stop loss. But this is not the right approach.

 

Suppose you bought a share for 625 rupees, and according to your calculations the share could go to 636. In this case, before buying, you need to see how much the stock can come down if it goes in the opposite direction of your calculation.

For example, 4 rupees can befall, 625-4 = 621 / –

Here you can keep STOP-LOSS near 619-619.50

If you buy at 625 targets 636, the calculation will be 11 rupees per share if your profit, 5-5.50 if the loss.

This is the most common calculation. Always decide P&L Ratio– 2:1 or 3:1

 

Now if we talk about The technical strategy, then the stop loss calculation will be a little different.

If you are trading shares using the Support & Resistance strategy, then you have to put a stop loss just below the support.

For example, Axis Bank’s stock has moved from 366 to 324 and its significant support is 320, so the buy position is 321.50 and the stop loss is 317-317.50.

You can keep Target 329-333, if the market is good you can keep Target 337

Of course, keep in mind that if you are doing intraday or swing trading it would be better to use a 15 min-30 min time frame.

I have already discussed the full details of how the Support & Resistance strategy works.

You can take a closer look at the whole thing by clicking on this link.

Just one simple line wants to say “Always Buy Near Support & sell near Resistance.”

So Genuine Rules to keep Stop-loss near Support(if you go to buy-side).

 

If you find Double Bottom or Double top shares, your stop loss will be much smaller, you can only apply a 1% stop loss from Bottom Point to Top Point.

For example – Image screenshot

 

Occasionally you will see some stocks breaking or moving up or down a lot of moving averages at once. In technical analysis it is called Breakout or Breakdown; in this case, I will put a stop loss a little above the biggest moving average. (Breakdown)

 

However, it is very important to do stop loss. If you can learn the technical analysis work well, then you can enroll in our Technical analysis Course.

For example – Image screenshot

A lot of times it happens that you have set the right stop loss, but the stock has started to rise again after hit stop loss and at that moment if you think the stock will hit its target, then you can buy it again.

There are many people, who reduce stop loss and average again and again, but you have to look at the average, otherwise, there could be a big loss.

 

What Is Stop Loss Hunting?

Stop Loss Hunting – This is a very popular name in the stock market. In other words, the big players in the market knowingly let the price of a share increase, the small players in the market jump to buy those small shares, and then the big player book profit and do short selling.

That is why the stop loss of small players touches quickly.

It’s called Stop Loss Hunting. However, this type of game is played on small shares i.e. shares below 100 Rs. Because those stock’s volume & liquidity are too low. So manipulation is very easy for them.

 

Before buying anything, you have to decide what will be the purchase price of that stock, what will be the target, and what will be the stop loss.

Before buying anything, you have to decide what will be the purchase price of that stock, what will be the target, and what will be the stop loss. After selecting these three prices you will buy the shares.

However, in the case of delivery trading, stop loss cannot be applied, because the stop-loss you applied at 30 minutes past three will be canceled.

In the case of Delivery Trading, you can apply Stop Loss every morning if you want.

However, in the case of intraday trading, stop loss is very important.

 

How to Place Stop-loss Order?

Now I will tell you how to order stop loss, you can make stop-loss through computer or mobile.

Suppose you bought a share of State Bank for 205 rupees 30 qty.

Now you have set a target of Rs 212 and a stop loss of Rs 201 according to your analysis.

Now the question is how you do make 201 stop-loss, first click on the sell button of state bank shares (example),

Will have complexity (Co),

Order type will be Limit,

Position – will be intraday,

TIF – will be DAY

Below you will find four more boxes. QUANTITY, in this room you will put 30, that is, the number of shares you have bought, that amount will be put.

Set SELL PRICE 201, which means the price you held as a stop loss. DISCLOSED QTY will always be 0.

Below that you will find a box called STOP LOSS BUY, in that box you have to put the price of Stop-loss i.e. Rs.

In a word, whenever I make a stop loss, then the price of the sale price and stop-loss buy should be kept the same.

Now Your Stop-loss Order placed successfully.

 

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The Advantages and Disadvantages of Stop Loss orders?

  • You can change your irregular and uncontrollable trading style.
  • Get rid of irregular unnecessary excess losses.
  • Stop-loss – An important part of the rules of the stock market, which you must obey.
  • By applying Stop Loss, you can calculate in advance how much you are losing, whether the amount of loss is within your budget.
  • There are many people who make huge losses in a short period of time due to non-imposition of stop loss and disappear from the market.
  • So stop loss is very important for the survival of this business.
  • Doing limited losses by applying stop loss.
  • Those who do not use stop loss incur significant losses.
  • If you are repeatedly going to touch Stop Loss. This means that there are errors in your analysis.
  • This way you can understand how skilled you are in the stock market, or how much work you have learned from Stop Loss.
  • Suppose you have traded ten times in 7 days, how many times in these ten times the target has been touched, and how many times stop loss has been reached.
  • If you hit the target 7 times out of 10 times, you think your analysis is OK, and if you hit stop loss seven times out of 10 times, then you think there is an error in your analysis.

 

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What Is Stop Loss In Share Market

 

 

My Words

I hope you like my article “What Is Stop Loss In Share Market, Place Stop Loss Order, What Is Stop Loss Hunting” and your knowledge has increased it a lot I have made a mistake in this article or if you have any questions, feel free to leave a comment in the comments box and I will try to answer your question as soon as possible.

 

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