3. STOP LOSS
• Stop your losses
• Control investment risk
• Stop from More than your pocket allows
Key Note: COMMITMENT
4. TWO TYPES OF STOP LOSS
Protective Stop Loss:
Conservative or Tight
Dull market & Risky Stock
Protects from downside risk
Progressive Stop Loss:
Used in stocks with
profitable move
Bull market & Potential Stock
Protects from upside risk
5. WHY WE SHOULD USE STOP LOSS?
• Protects from false move
• Prevent small losses becoming larger
• Can save from unexpected or sudden move in price
• Avoid emotional influences
• Helps to stay on track
6. LIMITATIONS
It can cut your profit margin
Can give you false signal
Short term trading tools
7. HOW TO SET STOP LOSS:
• No perfect and satisfactory rules
• Depends on judgments, Stock price and its habits
• Should it be more tight or little wide?
• Should I use trailing stop loss?
8.
9.
10. FACTORS TO BE CONSIDERED BEFORE USING
STOP LOSS
• Determine the amount of loss that you can afford.
• Always consider market CONDITION
• Target liquid shares
• Always give at least 5% space to avoid market abuse.
11. CONCLUDING NOTES
• It works like an Insurance policy
• It doesn’t guarantee of making money
• If you fail to make intelligent investment decision, you’ll lose
money but in a slower rate.
• Always stick to your commitment in downside risk
