🛑 Stop Loss Order

🛑 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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