StocksResult
📝 What is a Stop-Loss Order?
🚫🔻 What is a Stop-Loss Order?
🔍 Meaning of Stop-Loss Order:
A Stop-Loss Order is a safety tool for traders and investors.
👉 It tells your broker:
"If the stock price falls to a certain level (called the Stop-Loss Price), sell it automatically to limit my loss."
In short:
"If the price goes against me, get me out to prevent bigger loss!"
🎯 Why Stop-Loss is Needed?
✅ It saves you from huge unexpected losses.
✅ You don’t have to sit in front of the screen all the time.
✅ Automatically gets you out of danger when price falls badly.
📚 Example to Understand:
You bought stock "ABC Ltd." at ₹100.
But you fear —
"If the price drops below ₹95, I can suffer losses."
So you place a Stop-Loss Order at ₹95.
✔️ If price stays above ₹95 — nothing happens.
✔️ If price drops to ₹95 — your shares will automatically be sold.
✔️ You are now protected from bigger losses (like price falling to ₹80, ₹70 etc.).
👉 Your maximum loss = ₹5 per share — not unlimited!
🧩 Different Types of Stop-Loss Orders:
1️⃣ Stop-Loss (Limit) Order:
👉 Sell when price hits ₹95 — but only at ₹95 or better (₹96, ₹97).
❌ Risk: If market moves fast, your order may not get filled.
2️⃣ Stop-Loss (Market) Order:
👉 Sell immediately at market price once ₹95 is hit — no matter what the next available price is.
✅ Fast exit, but price may slightly vary.
💡 Real Life Example (Easy to Imagine):
🛍️ You are buying gold.
✔️ You tell the shopkeeper —
"If gold price falls below ₹5000/gm, please sell my gold immediately!"
✅ You get saved from gold price crashing badly.
Same way — Stop-Loss Order saves your stock value from a free fall.
❗ Why Use Stop-Loss?
✔️ To protect profit.
✔️ To limit loss.
✔️ To trade stress-free (you can sleep without fear!).
✔️ Best friend of intraday traders and swing traders.
🔥 Important Tips:
🚫 If you put stop-loss too close (e.g. ₹99 for ₹100 stock), you may exit unnecessarily.
🚫 If you put stop-loss too far (e.g. ₹70 for ₹100 stock), you risk bigger losses.
✅ Ideal stop-loss depends on your strategy and risk tolerance.
🎯 Quick Summary (Super Simple):
📝 Stop-Loss = “Automatic Safety Switch”
If price falls badly, your stock is auto-sold — no manual action needed.
Saves you from big losses. Must for every smart trader!