Rakibul Hossen

GOOD EVENINGTOPIC: BEHAVIORAL TRADING ANALYSIS

STOP LOSS

• Stop your losses• Control investment risk • Stop from More than your pocket allows

Key Note: COMMITMENT

TWO TYPES OF STOP LOSS

Protective Stop Loss:Conservative or Tight Dull market & Risky StockProtects from downside risk

Progressive Stop Loss:Used in stocks with

profitable moveBull market & Potential

StockProtects from upside risk

WHY WE SHOULD USE STOP LOSS?

• Protects from false move• Prevent small losses becoming larger• Can save from unexpected or sudden move in price• Avoid emotional influences• Helps to stay on track

LIMITATIONSIt can cut your profit marginCan give you false signalShort term trading tools

HOW TO SET STOP LOSS:

• No perfect and satisfactory rules• Depends on judgments, Stock price and its habits• Should it be more tight or little wide?• Should I use trailing stop loss?

FACTORS TO BE CONSIDERED BEFORE USING STOP LOSS

• Determine the amount of loss that you can afford.• Always consider market CONDITION• Target liquid shares• Always give at least 5% space to avoid market abuse.

CONCLUDING NOTES

• It works like an Insurance policy• It doesn’t guarantee of making money• If you fail to make intelligent investment decision, you’ll lose

money but in a slower rate.• Always stick to your commitment in downside risk