What is the ideal stoploss for banknifty in terms of fixed points?

An ideal stoploss should be placed based on the volatility of the scrip. I know lot of traders like the fixed 1%, 2% kind of stoploss, but there is a problem with this.

For example an instrument such as banknifty, is quite volatility…even if you are right about the direction of the trade because of the volatility of the scrip, a 2% SL can be easily taken off leading you to unnecessary losses…clearly the one size fits all rule does not work with stoplossess.

Hence, I’d advice you look at how volatile the scrip is, and then place an appropriate SL.



I urge you to google - how to use ATR for stops. Its an excellent tool and I personally use 1.5 ATR for stops. It would be tough for me to explain its usage here, but there are several videos and detailed explanation available on the internet to give you a good and practical idea on its usage.

Like Karthik recommends, its a better idea to place a stop based on the scrips volatility, which the ATR can do.

Should you have any confusion even after the explanation on google/youtube, please do ask.

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Karunakumari, could you post a few links please. Thanks.

You can start with this video…

Is ATR same as True Range indicator in NEST Trader software?