Is it necessary to keep a Stop loss in your trade? The MoneyControl Way
To become a successful trader, it is necessary that you set a daily maximum loss set before you begin share trading for the day. It refers to the maximum amount of loss that you will allow yourself to lose in a given day. It is highly important for a new stock trader as they are more vulnerable to overtrading. Every trader goes through a stage where he incurs losses. It is a point where a trader does not want to stop and keep trading until he covers up the losses, which leads to an incessant series of losses.
Sometimes it may cause them to lose months of profits in a matter of hours. One should know when to put an end to such blind losses. You should set a given percentage of your account for losses.
Never risk it all in one go
Don’t use up the maximum loss for the day in a single trade. If you make several trades in a single trading day, it is important that you use a specified amount of your maximum loss in a single trade so that you have a chance of recovering your current loss in successive trades.
Take help from your broker
You can set up a daily maximum loss with your broker. This will lock down your account once you reach the maximum loss count. This will prevent you from the “spend it all” attitude. Making provisions for losses is as important as making successful trades.
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