The 'Stop Loss' (SL) order is a crucial tool for online stock trading, acting like insurance against significant losses due to price fluctuations during market hours. It's particularly essential for day trading, which is inherently risky. However, placing an SL order does not guarantee complete safety; traders can still incur substantial losses. If the market moves past the trigger price without any corresponding buyer or seller, the order may not execute as expected. Traders should be present to manage their orders or have a broker authorized to act on their behalf. It's wise to maintain a reasonable gap between the purchase/sale prices and the trigger price, considering market factors like volatility. If traders are unable to monitor the market, it is advised to refrain from trading. While an SL order might initially seem negative after executing a trade, it can be beneficial when used to secure profits. Traders should avoid taking profits too early and instead adjust their SL as the market moves in their favor, allowing for potential increased profits through trailing stops. This article serves to advise stock market traders on safe trading practices to prevent significant losses.

by Valibhai Musa in English Motivational Stories

Writen by Valibhai Musa

Category Motivational Stories