Money-Making Lesson from Market Guru: Anil Singhvi tells you how to find a stop-loss
If you are a new investor and are still coming to grips with the complicated nomenclature involved, things like stop-loss, and are looking for an easy explainer, then your quest for finding answers, ends here. Remember, this is one of the biggest money-making lessons you can get and will be the difference between whether you make money on markets or not
If you are a new investor and are still coming to grips with the complicated nomenclature involved, things like stop-loss, and are looking for an easy explainer, then your quest for finding answers, ends here. Remember, this is one of the biggest money-making lessons you can get and will be the difference between whether you make money on markets or not.
To make it easier for channel viewers, Zee Business Managing Editor Anil Singhvi has a simple explanation! The Market Guru tells viewers that there are only two ways to find a stock's stop-loss value: One is the bookish method which is derived from the data and the second is the stop-loss that investors should apply based on their own risk assessments and their ability to bear losses.
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अनिल सिंघवी से समझिए स्टॉपलॉस लगाने के 2 तरीके...#Nifty #BankNifty #Sensex #StockMarket @AnilSinghvi_ pic.twitter.com/ISSHvLUJyc
— Zee Business (@ZeeBusiness) August 4, 2020
In the former, the data reveals a stop-loss level which is indicative of the market situation i.e. market will be good above this level or bad below this level.
As an example he said that if Bank Nifty has stop-loss above 500 points, you, as an investor, should ask if the same can be applied to yourself. Do you have the capability to bear a stop-loss of this magnitude or mark-to-market value?
If you don’t have this capability, then the data-based stop-loss is not of much value to you, he said.
An investor should have a fair assessment of the loss that he can bear. He further said that the investors should find a balance between the levels which are derived from data and their own risks and loss taking capability.
A single stop-loss cannot be applied for all investors with equal accuracy, so each investor should know his own specific level.
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If investors are not clear about their stop-loss, then the chances are high that they will earn less and lose more, Singhvi warned.
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02:59 PM IST