Contest||Stop Loss Order

Hello dear friends,
Greetings to you all, hope you are all doing great.
I'm so so delighted to participate on this contest titled: Stop loss order organized by @khursheedanwar on this great and wonderful community.

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What you understand by stop loss order in trading?

A stop loss order can be seen as a conditional order to buy or sell a security when it reached a specific price and is designed to limit potential losses.

This concept Stop loss order can also be seen as an order placed with what is a broker in other to buy or to sell a security when is due or in an approximate price which is known as a stop price, is basically designed to limit potential losses.

Major purpose of stop-loss order is to significantly inject a risk management control (zero worries about the uncertainty) and profit protection of any kind of transactions for smooth functioning.

How it works? 👇

Sell stop-loss; This has to do with setting up a stop price policy and it should be below the current market price, If pare-eventually the security that was set falls to or below the price set stop lose order then becomes a market order.

Buy stop-loss; This also has to do with setting up a stop price above the current market prices and if it happens that the security that was set rises to or above the price set the stop Loss order becomes a substantial market order in buying the security of the next accessible prices.
Just know that, a Stop-loss orders can be generally used in different financial market industries like the forex, stocks, futures etc.

What is the importance of stop loss order while trading?

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With me here, are some few importance of a stop Loss order while trading, these are as follows:

• Locking Profits: The main importance of stop loss order is to lock in profits by selling a security if it reaches a certain price to avoid loss.

• Capital Preservation: Stop loss order while trading helps deeply in protecting a very significant part of trading capital from catastrophic losses.

• Emotional Control: It drastically helps marketers, traders or investors to avoid any fear of the unknown or anything that can cause emotional instabilities.

• Overnight Risk: Stop loss order while trading significantly reduces overnight risks with market volatility during night trading.

• Flexibility: Stop loss order while trading is very important because it allows traders to adjust stop loss levels as subsequent market conditions change overtime.

• Risk Management: This very much significant in stop loss order, because that is it major roles or purposes, it helps in Limiting all forms of potential losses by automatically selling a security if it falls below a certain price level, because everything has been put in place in case of any occurrences in the market volatility.

There are many more importance, but lemme stop here, however, by using a stop loss order many traders can be able to manage risk, protect their capital and support many strategic trading planning.

Thank you friends for stopping by and for reading through my blog.

Invitations:
@echucku
@owulama
@dave-hanny
@joan-na

Best regards @ibraheem75.