🛑 Stop Loss Order
Part of Complete Stock Market Learning Series
📌 What is a Stop Loss Order?
A Stop Loss Order is used to limit losses by automatically exiting a trade when the price reaches a predefined level. It protects capital when the market moves against you.
⚙ How Does a Stop Loss Order Work?
- ✔ You set a trigger price
- ✔ Order activates when price hits the trigger
- ✔ Helps control downside risk
📉 Example of Stop Loss Order
Suppose you buy a stock at ₹1,000:
- ✔ You place a Stop Loss at ₹950
- ✔ If price falls to ₹950, order gets triggered
- ✔ Loss is limited instead of increasing further
🧾 Types of Stop Loss Orders
- ✔ Stop Loss Market (SL-M): Executes at market price after trigger
- ✔ Stop Loss Limit (SL): Executes within a set price range
👍 Advantages of Stop Loss Order
- ✔ Limits losses automatically
- ✔ Removes emotional decision-making
- ✔ Essential for risk management
⚠ Disadvantages of Stop Loss Order
- ✔ May get triggered by short-term volatility
- ✔ Gaps can cause execution at worse prices
- ✔ Needs proper placement
🧠 When Should You Use Stop Loss?
- ✔ In intraday and F&O trading
- ✔ When market volatility is high
- ✔ When capital protection is priority
⚠ Important Note
Never trade without a stop loss. Capital protection is more important than profit. Always calculate risk before entering a trade. This content is for educational purposes only.
🚀 Protect Capital Like a Pro
Stop loss is the backbone of disciplined trading. Survive first, profits will follow.
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