1. Either use technical analysis and place stop loss as per chart or under mentioned formula to get stop loss:
Stop Loss Price=Entry Price of Trade{Investment amount-(E*R)}/Investment Amount
Where E=Portfolio equity-(cash+holding).
Where R=Maximum Risk in percentage.
2. Formula for Stop Loss can be calculated by a different method i.e in same formula 'E' can be considered as core equity (what you are left when you subtract total value at risk in all open position from total equity).Value at risk is calculated by number of shares in position by difference between current price and stop loss on that trade.This action automatically reduces risk exposure on new position.
3. Remember that it requires Lion's heart to place stop loss and if you are able to perform this action half of your battle in stock market is won as you have limited your loss by applying stop loss.
Stop Loss Price=Entry Price of Trade{Investment amount-(E*R)}/Investment Amount
Where E=Portfolio equity-(cash+holding).
Where R=Maximum Risk in percentage.
2. Formula for Stop Loss can be calculated by a different method i.e in same formula 'E' can be considered as core equity (what you are left when you subtract total value at risk in all open position from total equity).Value at risk is calculated by number of shares in position by difference between current price and stop loss on that trade.This action automatically reduces risk exposure on new position.
3. Remember that it requires Lion's heart to place stop loss and if you are able to perform this action half of your battle in stock market is won as you have limited your loss by applying stop loss.
