Stop Loss Orders

I am new to trading. Kindly help me answering my questions. My apologies if you find them silly.

I read a lot over the internet to use stop loss orders to protect our investments. However some things are not yet clear. My questions are below:

  1. Are stop loss orders used only in “Intraday trading” and short term holdings like a couple of weeks or 1 month?

  2. Assume I start trading today for the 1st time in my life with zero holdings in my account. I do some research and decide to buy 100 stocks of XXX which is currently trading at Rs. 100/- per share and I don’t have plans of holding on to them for a long time. I understand that I can buy the 100 shares by placing either a ‘buy market order’ or ‘buy limit order’. Now, in the same ‘buy order’ form, can I use stop loss? say I want to set the trigger at Rs. 90.
    OR should I first buy using the ‘buy order’ and then place a 2nd ‘Sell stop loss order’ with trigger at Rs. 90?

  3. If I plan to buy stocks and hold them for months or years together with the intention of long term wealth creation, then I need not worry about the intermittent fall in stock prices and hence be least bothered about placing stop loss orders right?


  1. Stop loss orders can be used only during intraday. You can read more about stop loss orders here.

For short term positional trades you have to place stop loss order daily at market open.

  1. For long term holding no need to place stop loss order. But you need to have limit in your plan . If stock is falling below that limit you should review why it is falling. If it started down turn then exit.

  2. Yes You are Right.


Okay. Thanks a lot. Will keep that in mind.