Stop Loss

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 June 2010 What is the imporance of stop loss, why we should take a stop loss because many time stock again move after breaking the stop loss??

CA Shiv

CA Shiv (Expert)
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03 June 2010 Stop loss is important because one cannot go in loss beyond which he can not bare. Genereally stop loss should be there for the new users and the one who are not tht well versed with the market.
There are techniques to decide the stop loss for shares and commodities..
Chart analysis is done by the experts. If its done properly than stick wont move up breaking the stop loss.
e.g. if day high is 70, day low is 60 , purchase price is 68 than stop loss cannot be more than 61-62. There are technique to understand and decide the level of stop loss.