InvestorQ : How important is stop loss placement when I am trading intraday?
Nisha Chandani made post

How important is stop loss placement when I am trading intraday?

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Niraja Mehta answered.
3 years ago
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Stop loss is a trigger that is used to automatically sell the shares if the price falls below a specified limit. This is your protection or you’re insurance while you trade. Don’t ever get into a trade without a stop loss. You can get higher margins from your broker if you put your stop loss also at the beginning itself. This is called as cover order and you must always use a cover order to trade intraday. Many traders think that I will pout stops loss after observing the market. Don’t do that because you could get hit by market volatility.
Stop loss is beneficial in limiting the potential loss for investors due to the fall in the stock prices. For investors who have used short-selling, stop loss reduces loss in case the price rises beyond their expectations. This intraday trading strategy ensures emotions are eliminated from your decision. Be dispassionate while intraday trading and stop loss as a discipline. Emotional trading is not a good idea. Stop loss is like a defense mechanism.
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