How to use stop loss effectively in stock trading

What is stop loss in stocks trading

It is an integral part of every profitable trading system. Having a good risk management using stop levels is the key for a good money management system. Read through the stop loss guidelines for your stock market trades.

Why to use stop loss in stocks trading

Almost every trader who doesn’t use a stop loss fails sooner or later. Because it’s hard to recover from big losses, it is necessary to keep stop loss orders in your system. Learn to use stop loss orders.

It is not possible make only profitable trades. The key in trading is to minimize losses in failed trades and maximize profits in winning traders. That’s why you should not trade without a using of protection provided by a stop-loss order. Check out key rules for a stop loss order.

When to enter stop loss order

A lot of amateur investors place their orders before market opens. Most of these orders are based on some “hot stock pick advice” or some ”hot news” received during pre-market hours. The stop-loss orders or trade entry stop orders of these amateur investors are often filled in at a totally different price from what they expect and the price returns to the previous day’s close levels. To answer the question in the title, read my every day trading advice for better trades.

When to close a trade

A stop-loss order is an order you put into your broker’s trading software or system. It’s an order that activates when the price triggers the level set in the stop-loss order. This type of exit often happens automatically since the order is already in the broker’s system. Find out more about the automatic stop-loss order activation.

Using the right stop-loss strategy

There are many different ways to place a stop-loss in your trading. The right choice depends on your trading style and risk management rules. The stock market can be in different situations like high or low volatility, bullish or bearish trend, and it’s good to know when to use which rules. Discover two tips on stop-loss order methods.

Get to know trailing stop-loss technique

Trailing stop is one of the ideal orders for best online stock trade. The first placement of a stop-loss order happens when you enter a trade. When you enter a trade, you typically place a stop-loss order immediately on a level defined in your trading plan. The key is to manage this level as trade develops. This is often known as a trailing stop-loss technique. Read how to use trailing stop loss to make better trades.

How to avoid big loss

Every trader wants to make the biggest possible gain in any single trade but it’s also not possible to make only profitable trades. There are trades that are closed with a profit and there are trades that are closed with a loss. But the size of the outcome is the key. What are the key steps to avoid big losses in intra-day or swing stock trading?

A trader should remember that there are four possible results of every single trade: big gain, small gain, small loss and big loss. Using stop loss orders is a trade management technique that helps to achieve biggest possible gains from any single trade with stocks. Reveal the secret of how to sell stocks with biggest gain.