Which is the best STOP LOSS limit ?

M

Mr.Jani

New Member
#1
#1
Hi Trader,

I am a new trader. I trade in MINI-NIFTY. I am bit confuse with my STOP LOSS limit. Most of the time,

(a) I buy MINI-NIFTY. Price goes high, high, high. I wait, wait. Now price goes down, down. I think it will go high. and it goes high, high. & suddenly it goes too much down. I see my self in big loss.

(b)same thing happen in sale case but in reverse way.

So, I at the beginning, I am getting profit but at the end of trade I got loss.

Kindly help me to find best STOP LOSS. What is your wise experience suggest ? Feel free to give your thought on MINI-NIFTY as well.

Happy Trading.
 
P

ppmatkari

Member
#2
#2
There is nothing called best stop loss limit, it all varies from person to person depending on his/her risk appetite & the prevailing situation. Keep stop loss betn 5-10% initially then as you get into the profit zone move it accordingly, once you get to your desired level of expectations either get out or lock your profits by keeping stop loss at that level ( means say you expect 5% profit in a trade, once your profit goes above 5% say 7% then keep your stop loss at 5%), keep on increasing it if your profit keeps on rising till the underlying itself falls to your stop loss limit & trade gets executed. This is called as trailing stop loss, meant to protect capital. This way you also maximize the profit.
 
A

AW10

Well-Known Member
#3
#3
Mr. Jani,
Have u referred to "Teach a man to fish..." thread by Saint. You will find a structured approach to understand price movement thru that.
Sensible way to handle such situation is to keep moving your exit points as price moves in your favour.
When you enter a trade (says at 100rs, 500 qty), and your stoploss point below the entry point at 98 rs. With this you are taking a risk of 1000 [=(100-98)*500] rs by puting
If price moves to 102, and your exit is still at 98, you are leaving = 2000 rs [(102-98)*500] on table. It it goes to 105, you are leaving 3500 rs on table.

So it makes sense to move your stop point from 98 to 100 or 101, etc.. so that you leave less money on the table for market to take back from you.
You need to know the key points where you can move your stops.. If you put your stops are random level, then u are just ensuring that they get hit.. But if it is placed where
they shd be, then u can ride the trend.

Plz spend time in reading that thread / pdf and make your strategy to protect profit. Seems you don't have any strategy now..and hence you end up taking loss cause at that stage
the pain of loss is difficult to accept.. In market, we need to know when to cut our pleasure as well.. It is not one way street.. where mkt goes only in one direction.

Happy Trading.
 
T

trader.trends

Well-Known Member
#4
#4
Jani
You have not mentioned the timeframe of your trades. Do you do intraday or positonal trades in Mininifty. The strategy for each would be different.

If you are trading intraday and doing multiple lots then I would suggest quick taking of profits. If your trade has moved in your favor by 20-30 points book 50% of your investments, that is if you are trading two lots take profits on one lot and bring the stop loss on the other lot at entry point. Now if the market reverses you will still be in profit.
Almost every trade we enter gives us a chance to book some profits but waiting for bigger profits we make the cardinal sin of converting a profitable trade into a loss. Booking partial profits is a good strategy for intra day trades.
 
P

pkgmtnl

Well-Known Member
#5
#5
AW10 said:
Mr. Jani,
Have u referred to "Teach a man to fish..." thread by Saint. You will find a structured approach to understand price movement thru that.
Sensible way to handle such situation is to keep moving your exit points as price moves in your favour.
When you enter a trade (says at 100rs, 500 qty), and your stoploss point below the entry point at 98 rs. With this you are taking a risk of 1000 [=(100-98)*500] rs by puting
If price moves to 102, and your exit is still at 98, you are leaving = 2000 rs [(102-98)*500] on table. It it goes to 105, you are leaving 3500 rs on table.

So it makes sense to move your stop point from 98 to 100 or 101, etc.. so that you leave less money on the table for market to take back from you.
You need to know the key points where you can move your stops.. If you put your stops are random level, then u are just ensuring that they get hit.. But if it is placed where
they shd be, then u can ride the trend.

Plz spend time in reading that thread / pdf and make your strategy to protect profit. Seems you don't have any strategy now..and hence you end up taking loss cause at that stage
the pain of loss is difficult to accept.. In market, we need to know when to cut our pleasure as well.. It is not one way street.. where mkt goes only in one direction.

Happy Trading.
Click to expand...
Very well explained...
Do U know some1 who can build Expl AFL on sonme given conditions?
or U can build, U are reputed person....
 
A

AW10

Well-Known Member
#6
#6
Thanks.
Sorry I don't use Ami.. but I am sure in amibroker section of TJ or on the net, you can find various afl that people have written that marks the trailing SL line using Pivot high/low plus filter amount.

But, one can trade even without afl.. as long as they know what they are doing.

Happy Trading
 
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