Setting Stop Losses: System vs Mental
A Stop Loss is not an admission of defeat. It is the cost of doing business.
Where to place it?
- Technical Stop Loss: Placed below a Swing Low or Support level. "If price goes here, my logic is wrong."
- Monetary Stop Loss: "I will not lose more than ₹1,000." (Dangerous, because market doesn't care about your wallet).
System SL vs Mental SL
Always use System SL.
In a crash, "Mental SL" becomes "Hope". You freeze. The loss grows from ₹1k to ₹10k in seconds.
A System SL executes without emotion.
*Disclaimer: NSE/BSE frequently revise Lot Sizes and Expiry Days (e.g., SEBI Circulars 2024/2025). Always check the latest circular on nseindia.com before trading.
Standard Disclosure: Investment in securities market are subject to market risks. Read all the related documents carefully before investing. The content provided here is for educational purposes only and does not constitute financial or investment advice. AlgoStraddle Academy is not a SEBI registered investment advisor. Trading options involves high risk and capital can be lost.