Tuesday, 26 September 2017

Market Analysts Guide for Stop Loss Orders

A share market is a place where the investor becomes the partial owner of a company from which they are buying shares. However, the company has to be registered in Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

stock market tips

The Securities and Exchange Board of India (SEBI) is a regulatory framework of share market which controls and regulates the market movements. A market is an impressive place to great profits, but, it can be tough and confusing for the beginners to understand the market movements. Therefore, they are advised to first go through the share market tips concluded by the share market analysts, this will help them to get a clearer understanding of the movements and will guide them to take effective decisions ahead. For beginners, stop loss is one of those tips that should be applied to limit their losses because most beginners don’t have a strong appetite to bear the loss.

Stop loss orders can turn out to be a great tool for the investors where they can utilize the market situations even at the time of decline in share values. Thus, when applied properly, they can integrate into an effective strategy. Here are the types of stop orders:
  • Stop market orders – It will sell the allotted shares automatically once the order is activated. For instance, if the stop market order is set for Rs. 9000, then as soon as the stock reaches this pre-set value, then the system will immediately sell the shares to limit the loss.
  • Stop limit orders – It will automatically set a limit order whenever the market triggers decline in the share values.
Hence, the share market tips can help the investor to identify their preferences to manage their loss orders. It can be a great tool not just for the effective trading process, but, also for eliminating emotions from it. The reasons to apply stop loss orders are:
  • Insurance against losses
  • Automation of trading
  • Promotes disciplined investing
  • Keeps things simple
  • Removes market emotions
  • Flexibility of position management

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