How do you put stop-loss on existing stock?

Asked by: Prof. Tevin Williamson II  |  Last update: January 20, 2025
Score: 4.1/5 (17 votes)

How To Place A Stop Loss on the Chart for an Existing Position
  1. Click the Position line on the chart to initiate the Stop order.
  2. Drag the new order line to the desired price level. ...
  3. This Sell-to-Close (Stop) Order uses a Close Position order ticket. ...
  4. Click and Sell button.
  5. Confirm to Place Order. ...
  6. Modifying the Stop Order.

How can I put a stop-loss on existing shares?

When you place a regular buy or sell order ( Market or Limit), you would be able to access the SL feature by clicking on 'Advanced Options'. Select the ' SL -Stoploss Order' option and then mention the 'SL trigger Price' value. Your order will executed when the live price of the stock hits the tigger price.

Why are stop losses a bad idea?

The principal reason stop-loss orders don't work is because stock prices aren't serially correlated. This means that what happened yesterday or last month does not necessarily affect what will happen today, tomorrow or next month. Past price movements of stocks do not determine future price movements.

What is the golden rule for stop-loss?

The golden rule of Stop Losses is that they should never be moved away from the market once the trade is opened. If a trader feels that their stop loss is incorrectly placed, they are recognising that the foundations of their trade are incorrect and therefore they should close out.

How do I add a stop-loss?

How do you use a stop-loss order? Most online brokers offer a stop-loss as an option when you enter a sell ticket for a stock you own. All you need to do is choose how many shares to sell and what you want the stop price to be. The stop price of a sell order needs to be below the current market price.

Trading Up-Close: Stop and Stop-Limit Orders

23 related questions found

How much does it cost to put a stop-loss?

For a Buy Position of stock X at a market price of Rs. 100, consider the stop-loss trigger price fixed at Rs. 90 and the trailing stop-loss jump price fixed at Rs. 5: If the LTP of 'X' falls to Rs. 90, a sell market order is sent, and your order is executed at market price.

Where is the best place to put a stop-loss?

In the support method, an investor determines the most recent support level of the stock and places the stop-loss just below that level. The moving average method sees the stop-loss placed just below a longer-term moving average price.

What is the 7% stop-loss rule?

Always sell a stock it if falls 7%-8% below what you paid for it. This basic principle helps you always cap your potential downside. If you're following rules for how to buy stocks and a stock you own drops 7% to 8% from what you paid for it, something is wrong.

What is the best stop-loss strategy?

What stop-loss percentage should I use? According to research, the most effective stop-loss levels for maximizing returns while limiting losses are between 15% and 20%. These levels strike a balance between allowing some market fluctuation and protecting against significant downturns.

What is the 2% stop-loss rule?

One popular method is the 2% Rule, which means you never put more than 2% of your account equity at risk (Table 1). For example, if you are trading a $50,000 account, and you choose a risk management stop loss of 2%, you could risk up to $1,000 on any given trade.

What is the ideal stop-loss for a stock?

A common practice is to set the stop-loss level between 1% to 3% below the purchase price. For example, if you buy a stock at Rs. 300 per share, a 2% stop loss would be triggered at Rs. 294, helping you limit potential losses while accommodating normal market fluctuations.

Why traders don't use stop-loss?

The main disadvantage of using stop loss is that it can get activated by short-term fluctuations in stock price. Remember the key point that while choosing a stop loss is that it should allow the stock to fluctuate day-to-day while preventing the downside risk as much as possible.

How far should you put your stop-loss?

An active trader might use a 5% level, while a long-term investor might choose 15% or more. Another thing to keep in mind is that, once you reach your stop price, your stop order becomes a market order. So, the price at which you sell may be much different from the stop price.

Why does my stop-loss always hit?

Because your stop loss is always placed at an obvious price level where the smart money has the incentive to push the price higher, exit their trades, and then have the market reverse back in your direction. So the brokers are not really out to get you, it's just the way the market moves.

What is the trigger price for stop-loss?

Trigger price in stop loss

The trigger price, also referred to as the stop price, activation price, or stop level, is the point at which the stop loss order transitions from a passive state to an active one.

What is the formula for stop-loss?

Calculate Stop Loss Using the Percentage Method

Additionally, let's say you own stock trading at ₹50 per share. Accordingly, your stop loss would be set at ₹45 — ₹5 under the current market value of the stock (₹50 x 10% = ₹5).

What is the 1% rule for stop-loss?

Whether you use a stop loss or not is up to you, but the 1% risk rule means you don't lose more than 1% of your capital on a single trade. If you allow yourself to risk 2% then, it would be the 2% rule. If you only risk 0.5%, then it is the 0.5% rule.

How to setup a stop-loss?

Placing a stop-loss order is ordinarily offered as an option through a trading platform whenever a trade is placed, and it can be modified at any time. A stop-loss order effectively activates a market order once a price threshold is triggered. Traders customarily place stop-loss orders when they initiate trades.

What is the 6% stop-loss rule?

The 6% stop-loss rule is another risk management strategy used in trading. It involves setting your stop-loss order at a level where, if the trade moves against you, you would only lose a maximum of 6% of your total trading capital on that particular trade.

What is the 3-5-7 rule in stocks?

The 3 5 7 rule works on a simple principle: never risk more than 3% of your trading capital on any single trade; limit your overall exposure to 5% of your capital on all open trades combined; and ensure your winning trades are at least 7% more profitable than your losing trades.

How do you place a stop-loss order example?

For instance, if a stock is purchased at ₹100 and the loss is to be limited at ₹95, an order can be placed to sell the stock as soon as its price reaches ₹95. Such an order is known as 'Stoploss' as it aims to prevent a loss exceeding the predetermined risk.

What time of day is best to sell stock?

So just to quickly summarise:

If you're looking for the best time to either buy or sell a stock during the trading day it is; During the last 10-15 minutes before market close. Or about an hour after the market opens.

Do stop losses always get filled?

Therefore, in a rapidly moving market, a stop-loss order may not be filled at exactly the specified stop price level but will usually be filled fairly close to the specified stop price. But traders should clearly understand that in some extreme instances stop-loss orders may not provide much protection.

How do you know when to put stop-loss?

When deciding where to place your stop-loss, it's important to consider how much you're willing to lose. Consequently, a stop-loss should be placed far enough away so that it won't be triggered too early, but not so far away that there is a risk of losing significant capital.

What is the best take-profit strategy?

A very popular profit-taking strategy, equally applicable to option trading, is the trailing stop strategy wherein a pre-determined percentage level (say 5%) is set for a specific target. For example, assume you buy 10 option contracts at $80 (totaling $800) with $100 as profit target and $70 as a stop-loss.