How does a stop loss trigger work?

Discussion in 'Brokers & Trading Platforms' started by dominicsp, Aug 3, 2006.

  1. GOMZO

    GOMZO Member

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    thanks anurag,

    but still remains bit confusing as you described..
     
  2. gunavadhi

    gunavadhi Well-Known Member

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    why all this mess even after many explained about SL?you do one thing.select a good stock which trades in huge volumes.buy or sell 1 repeat ONE share.try all these types of sl there.you can see what the difference is...EASY.NA?
     
  3. GOMZO

    GOMZO Member

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    ok... lets c.. thanks..
    just tell one thing

    i observed some days ago that
    i placed an buy order for 100 Y share on limit price of rs 10/-. the LTP price came to rs 10/- but the order still remained pending. could you tell me why ? can it be happened on sale of share?


    thanks
     
  4. GOMZO

    GOMZO Member

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    hi..

    what a_anoop1 had asked in page 4 , that answered by no one.. so if someone can answer that will be helpful for me too... once again i am mentioning his question


    if for share "A " present market price is Rs.100. suppose the price of A is decreasing and it reached 99 . the price is going on decreasing..now i want to buy the share A at price 95.in ordinary case i will give a limit order at 95 and buy order will be executed once price of A reaches 95.
    now suppose i have opted for stop loss option for buying.price of A is 100 and its decreasing.i have given limit price as 95 and trigger price as 93.will it do any help?i mean still order gets executed (bought)at 95 right? or ,if the price of A is still falling and suppose it fell till 90(not a sudden fall straight to 90).so will the share be bought at 93?or will the share be bought at Rs.95 and sold at Rs.93 since price of A is going down?
    also if price of A has fallen till 94 and then it started rising.and for the whole day its price has never come down below 94.so will the buy order gets executed at 94?


    also similar doubt i have in selling the share also.

    suppose i bought share A at 95 rupees.if the price is still going down and i dont want to make a huge loss. if i want to sell the share at any price between 91 and 92.so i will give limit price as 91 and trigger price as 92 right?

    alsoif i bought share A at 95 and suppose the present market price of A is 105 and its going on increasing.now i want to sell it when it reaches 110 or more?so giving a stop loss order with limit price 110 and trigger price 113 will do any help ?i mean if price of A has increased till 115,then will my shares get sold at Rs113 or still at 110 only? also if price has reached only till 111 and after that it started decreasing and the whole day it never has gone above 111.since my limit price is 110 and trigger price is 113 ,will the shares get sold at 111 ?


    thanks in advance..
     
  5. murthymsr

    murthymsr Well-Known Member

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    The order matching priority takes into consideration:

    - Market orders

    - Limit orders

    - Time of placement of the limit order

    It is likely that the LTP is on account of a market order or a limit order placed earlier than yours. Also the quantity available (offered) for sale at that price may not be sufficient to to cover upto your order by seniority.

    Refer NSE web site for more detailed information.
     
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  6. sanjay1876

    sanjay1876 Member

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    What is Stop Loss Order?

    What is Stop Loss Order?

    Definition as on ICICIDIRECT.com:

    A Stop loss order allows the client to place an order which gets activated only when the market price of the relevant security reaches or crosses a threshold price specified by the investor in the form of 'Stop Loss Trigger Price'. When a stop loss trigger price (SLTP) is specified in a limit order, the order becomes one which is conditional on the market price of the stock crossing the specified SLTP. The order remains passive (i.e. not eligible for execution) till the condition is satisfied. Once the last traded price of the stock reaches or surpasses the SLTP, the order becomes activated (i.e. eligible for execution by being taken up in the matching process of the exchange) and then on behaves like a normal limit order. It is used as a tool to limit the maximum loss on a position.


    Please read the last line carefully. "It is used as a tool to limit the maximum loss on a position". If you do not have any positions it is of no use. You can still buy/sell setting SLTP just for heck of it(unless you are using charts and looking for breakout).

    Many novice trader i've seen get confused because they think they'll be able to automatically sell the shares they buy by setting SLTP. There is no way to do it. There must always be a sell order to sell the shares, and it is where SLTP is needed.(and vice versa if you have short positions)

    Maybe this helps.
     

  7. riaz

    riaz New Member

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    Dear Members, I'm new to trading. Can anyone please explain the details asked in stop loss order placing window in GoTX software from Karvy. It asks like - validity, fill type, Dissc Qty, Trigg Price, Protect %... can you please help me in this aspect. Thanks a million in advance.
     
    Last edited: Apr 12, 2010
  8. kaushikbanerjee

    kaushikbanerjee Active Member

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    I think u have not given stop loss correctly. Otherwise it would have been executed at 123 or slightly below it.

    Anyway, let's say u bought stock ABC @ 100.
    U like to sell it either at 120 (your target) or 95 (your stoploss).
    U give two sell orders.
    First sell order at limit price 120.
    Second sell order at trigger price = 95 and limit price = 94.

    But beware, if one order gets executed, cancel the other order.
    Otherwise both orders may get executed if market turns in opposite direction.
     
  9. kaushikbanerjee

    kaushikbanerjee Active Member

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    Validity = Validity period for your order to remain in the exchange (Generally it is the current day)

    Trigger Price = usually used as stoploss price.
    Suppose u bought a stock at 100. If price falls u want to sell it at 95 not holding anymore.
    Let the stock is now trading around 99. Now if u give sell order at 95 it will be immediately executed at current price of 99. So u have to give sell order with Trigger Price = 95 and Limit Price = 94 (or anything below 95).
    Then your order to sell will be triggered in the exchange only if the price falls to 95.

    For other terms see : http://www.traderji.com/beginners-guide/29378-please-explain-what-disclosed-qty.html
     
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  10. kaushikbanerjee

    kaushikbanerjee Active Member

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