Hi-P – [ 3 Reasons Why Stop Loss Is So Important]
Chart Source: Poemsview 14th June 2018
Hi-P just got sold off again and ever since we had to stop loss, Hi-P continued its slide down of almost 8%.
Stop loss is a very important discipline to have and we cannot emphasize how crucial it is for us.
Not having Stop loss is kind of like driving without a seatbelt, dangerous eh? You won’t take a chance and would buckle up every time you enter the car. So why take a chance in trading too? Cutting loss is not all bad, here’s why.
- Cutting loss frees your mind, it takes off the stress of anticipating if the stock will rebound or not and it sets your emotions free. No longer are you a hostage of the trade. And having a clear mind when trading is very important too.
- It Caps your downside loss. So often many traders have a good winning streak but all it takes is one big lossing trade to wipe off that gain. It’s not worth it. Cap your losses so that it will not eat into your profits.
- It instills discipline! When you are able to stop loss and practise such good habits it will go a long way in your trading journey and even in life. Not second guessing and willing to stop loss are a mark of a good trader.
So, cutting loss is not that bad after all right? With a sound trade plan, a trader is already prepared for any downside eventuality.
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