Intraday Trading Tips to Apply Stop Loss

Posted by Santosh Sharma on June 16th, 2017

An intraday trading is a marketplace where the traders need to book their positions on the same closing day. As the term reflects, an intraday trading means a day trading where the market shuts down on the same day and no position is carried forward for the next trading day. Thus, the traders step into this market with an only purpose of making a great profit in a single day and therefore, it is not a right trading market for the investors with the purpose of investment. For sure, anyone can make quick money from this market, but, one thing makes it the most complex and unpredictable market, which sometimes can put the trader into great loss as well. Hence, to avoid the losses, traders can apply stop loss. The market analysts advise that the traders need to constantly keep an eye on the fluctuating value of shares, but, with stop loss order, they don’t have to actively track the share values. It is one of the intraday trading tipsto follow stop loss because the order is triggered automatically once the share price reaches the target of either profit or loss. Once the price reaches the target price, the stop order becomes a limit order or a market order. Hence, stop order can be applied to limit the loss in this unpredictable and volatile day trading market.

Stop loss limit order:

Stop loss limit order means to set a specified limit price in order to sell or buy the shares, not beyond the specified price. In this way, if the traders follow the intraday trading tips, he is free to have control over the fluctuating values.  For example, an investor has 100 bucks to put into the intraday trading, here, he can apply stop loss buy limit order to purchase the stocks with a price of not more than 100 bucks.

Stop loss market order:

Basically, this market order is applied to limit the trading loss. In this case, the experts say that intraday trading tipscan only be helpful if the trader knows how to limit the losses and thus, stop loss market order can let the trader enjoy the delights of profit. For example, if a trader is holding a stock valued at Rs.500 and to avoid the loss, he places a sell stop order at Rs.400. Therefore, the stock will be sold once it reaches a specified target limit of loss. Hence, the traders can limit their losses in such a volatile market.