Regarding using StopLoss in share market trading

#1
I am very beginner to Stock Market and eager to learn basics of Stock Market.

I have almost covered all the Topics of Stock Market.

But I have a problem regarding the topic StopLoss.

I read & understand all of the definitions of StopLoss.

But I want to know that what is the CORRECT PROCEDURE of using STOPLOSS PRACTICALLY ?????


Kindly give me an example of:-

Use of StopLoss for BUYING any share
&
Use of StopLoss for SELLING any share.

Kindle HELP me out to Understand this..

Reply me as soon as possible..

Thanking You..
 
#2
Well Stop loss is not as complicated as you are taking. Its simple to apply. Its only purpose is to prevent you from excessive losses.

Lets take examples:
:D:clap:
1. The market is going bull. You are riding on Axis bank share and you are expecting that the share's price will remain increasing. You go for a buy. Take it the current price be 1400. You bought 1 share at 1400 and you have plans that you will sell around 1450 or 1500.
Well, as it is a very common rule that the market is totally risk oriented, nothing can be predicted.
You are advised to set a stop loss at 1390.
Now WHAT IS STOP LOSS??
Stop loss is something that doesn't earn you profits, but it reduces your losses.
Stop loss order can be placed with the current market order.
Now, if in case the market falls. The BEAR starts dominating the BULL and the market falls.
Now it is only the Stop Loss limit of 1390 will save you from excess loss.
As soon as the price of share reaches 1390, Automatically the shares will be sold.
Yes indeed you will incurr loss but that loss will be an nominal one, NOT AN EXTREME ONE.

VICE VERSA

2. The market is going BEAR and you short sell the share at 1400 and you want to square off before 1530 hrs, you need to buy before the market close.

Short sell means selling of shares when the market is open expecting that the market will fall. With this expectation, the trader sells the share in the beginning and when the price falls, the trader will buy at a lower price.

In the morning, you expect that the market will fall today and you sell the security at 1400. You plan to square off when the market goes below 1320 or 1300.

Again the market is not enough predictable. If you set a stop loss at 1410, you are now reducing your losses.

So if the market rises and reaches 1410, automatically the shares will be bought to your account squaring off your transaction and you will suffer a loss of only Rs. 10.


I HOPE IT IS CLEAR.
ASK ANYTHING.
 
#3
ok ok..

Thanks for the answer..

Yes, It's Very Clear to me and it's very very understanding to me.. Again Thanks..

I hope it continues further as it is.. Now back to the topic..

I have some questions arise here..

Firstly, you tell earlier that Stop loss order can be placed with the current market order.

Current market order means Current Market Price ?? Am I right ??

Now tell me that -----

Can I place Stop Loss order with LIMIT ORDER for Buy a Share.. If yes, then give me an Example with Explanation and also tell me that in which condition it will be used ??

My second question is----

What is the difference between SHORT SELL and SELL ??

If I place only SELL order rather than SHORT SELL (in your condition you have stated above earlier) then what's wrong with that ??

In one sentence, I want to know that in which condition I place SHORT SELL and SELL orders ?? Please Elaborate..


Please Reply as soon as possible..
I am waiting for your reply..

Thanking You..
 
Last edited:
#4
Regarding use of StopLoss, Limit Order and Short Sell in share market trading

ok ok..

Thanks for the answer..

Yes, It's Very Clear to me and it's very very understanding to me.. Again Thanks..

I hope it continues further as it is.. Now back to the topic..

I have some questions arise here..

Firstly, you tell earlier that Stop loss order can be placed with the current market order.

Current market order means Current Market Price ?? Am I right ??

Now tell me that -----

Can I place Stop Loss order with LIMIT ORDER for Buy a Share.. If yes, then give me an Example with Explanation and also tell me that in which condition it will be used ??

My second question is----

What is the difference between SHORT SELL and SELL ??

If I place only SELL order rather than SHORT SELL (in your condition you have stated above earlier) then what's wrong with that ??

In one sentence, I want to know that in which condition I place SHORT SELL and SELL orders ?? Please Elaborate..


Please Reply as soon as possible..:eek::eek:
I am waiting for your reply..

Thanking You..
 

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