Prajna Capital - An Investment Guide

Stop-loss orders are like health policies for stocks, which come at zero premium. Besides reducing your losses, they also help you to lock in your profits Talk to investors and we find thousands of instances where people just ignored one basic principle of investing: Setting stop losses and sticking to it. What is stop loss? It is a pre-defined order to automatically sell a stock when it falls to a certain level. When the stock reaches the point, the stop-loss order becomes a market order and the trade is executed. It’s a very important investment tool, especially if you are typically trading in a bullish market situation, which helps to save the larger part of the pain in case the sentiment turns How it helps? Stop loss is an important risk-management tool used to exit a stock before it falls any further. This not only helps in reducing your losses but also to lock in your profits. Consider you bought a stock sometime ago at Rs 100 and the stock is now trading at Rs 140. Now some n...