Stop losses are used to control investment risk and limit losses from downward price movements. There are two types of stop losses - protective, which is used for risky stocks in dull markets, and progressive, which is used for potential stocks in bull markets. Stop losses help prevent small losses from becoming larger by cutting losses at a predetermined price. However, stop losses also have limitations, as they can cut into potential profits and give false signals. When setting a stop loss, factors like one's risk tolerance, the stock's price habits, and market conditions should all be considered.

1. GOOD EVENING
TOPIC: BEHAVIORAL TRADING ANALYSIS

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?

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