In today's video we are going to
see what is stop loss? How do the
Successful people in the share market use the
stop loss? And then we will discuss about
3 simple techniques to apply the stop loss
which you can immediately include in your trading,
then I will take you to my charts
to show how exactly traders make money in
the market with real chart, with real trades
stay tune...
Hey friends, I Amit welcome you all
to my you tube channel Managetrading.com, just like
every other day, today also I will take
a question posted by one of you guys
and will try to solve it and I
hope this will be helpful to all other
friends out there trying to learn trading.Today?s question
is by Mr Pankaj and he asks: sir
ji please tell me something about stoploss and
how to use it? Good question Mr pankaj.
See stop loss is very simple to use.
I will give one example so that the
concept will be clear to you, assume that
we are on a junction and we are
trying to find a shop. We got the
name of the shop with us but don?t
have the full address. First   we
will ask someone about the direction and start
on moving towards that direction. We have also
come to know that the shop is hardly
5 - 10 mins away, now we are
moving towards the direction but still after 15
mins or so we are not getting the
shop and we can see a straight road
where there is no one but only fields,
there is no shop, no people so what
you will do? You will keep moving on
that straight road or you will think of
asking again to someone about it? Answer to
it is very obvious, you have to ask
again and find out the right way towards
that shop. If this example make some sense
then I am sure you can understand the
stop loss also very easily. See when we
buy a trade we start moving from the
junction towards the road of profit, if we
are on the right path we will get
what we are looking for but if we
have chosen the wrong way then we know
the price is not going towards our expected
direction in fact its on opposite direction, as
we saw in our example whether we should
continue on that lonely road or immediately change
our way. I always keep on saying "Hope
and Hold is our biggest enemy", many people
think that the technique, candle pattern they know
are the best and if they ask me
to stay on the same lonely road I
will stay. I suggest you not to think
like this, keep a fix point or a
price level in your mind.  Even If
we are on a wrong path so we
can immediately stop over there and find the
another stock to buy for. It may be
possible that you will find your profit price
within 5 to 10 mins. Now you know
what is stoploss and why it is important.
Lets talk about the right technique to apply
the stop loss. 1. In share market there
is one golden rule that always guides us
and i.e. rule of 2%, wherever we buy
or whatever logic we use, we will bare
only till 2% loss and if price is
going beyond 2% we will immediately come out
of the trade. This 2% rule is a
thumb rule but not hard and fast rule.
You can change from 2% to 5%. If
you are very new to the market this
rule will help you in anyway. But if
you are trading on a professional level idea
no. 2 is Stop loss for next trade
will be equal to profit of last trade.
If suppose my last profitable trade was rs1000
then for this trade I will bare 1000
to 1200 rs only, and if the price
is still going beyond I have to come
out immediately. There is another way of looking
at the stoploss suppose in this month your
total profit is 10,000 rs and total loss
is 7,000 rs then you can bare loss
of 3,000 more and if your total loss
is crossing 10,000 rs then you have to
stop your trading for that month. 3. You
use various technique to take a trade whether
it is candle stick pattern, price pattern or
moving average, find the lowest price point of
that chart and place the stop loss under
that. Stop loss is nothing but a simple
limit order, if you're an intraday trader as
soon as you took the trade you have
to place a new limit order and if
you are a short term or a long
term trader you don't have to place the
limit order at that time but have to
keep in your mind and if the price
is moving in opposite direction towards our stoploss
price you have to immediately place the limit
order. If you trade in a right way
trading is not at all gambling. It becomes
our second source of income. Now lets see
our trade, this is Hindustan lever daily timeframe
chart. You know that whenever I take trade
I use my 5 indicator technique which has
given me profit from long time and those
who want to learn this technique you can
find the link below in the description box.
See we have chosen a quality stock over
here, with the help of 100 moving average
we have confirmed the uptrend, then with the
help of stochastics waited for the price to
slightly come down, here we can see the
stochastic at its 20 level, then the price
is also supporting the small 50's moving average
and when we join the last two lows
here we got a trendline which is acting
as one more support level, and then at
a specific price we take a trade. Here
where the price has turn slightly we will
place our stoploss little lower. So with the
help of these techniques if you are trading
your stoploss will hit hardly once in 10
to 15 trades and if the price is
hitting your stoploss you have to come out
of that immediately. To earn lot of money
from (Indian) share market is not a big
thing, just with little bit of patience and
discipline we have to keep control on our
emotions. After taking a trade if price is
hitting to our target directly then it's well
and good but if it is hitting our
stop loss then do not Hope and Hold,
come out of the trade with a discipline
and focus on the other trade. isn?t it
simple!So thank you guys for lots of support
and comments. If you are new here you
can find my 5 indicator technique ebook's link
below in the description box,if you want you
can download it for free you will get
in your email id immediately and also you
can get my stock's watchlist everyday to make
you understand this technique easily.if you haven't subscribe yet please subscribe, comment and like.
There is a link below in description box for subscription. 
here we daily take one querry posted by one
of you guys and discuss about it we
share lots of tips ideas, suggestions with you
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 goodbye and happy trading...
