Tuesday, September 14, 2010

Stop loss

Stop loss is an order placed with the broker to sell once a stock reaches a certain price.

The key is to set an appropriate stop loss percentage for a security. E.g. it would be unwise to set a 5% stop loss on a security when its average fluctuation is 10%.

The stop loss level also depends on whether you are an active trader as a long term investor.

1 comment:

  1. Stop loss is a buy or sell order which activated automatically, once a stock value reaches a certain price. It is best when market is declining continuously and a trader want to protect his money from over loss.
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