Why Stop losses are getting hit often?

Why my stoplosses are getting hit 8/10 times ? I only trade in one scrip SBI FnO. My target is 35/45 p and stop loss as Re 1. If it goes in my direction, I am profitable but even after having Re 1 as my stop loss, it sometimes reverses and hit my stop loss there by incurring loss. This loss wipes out my profits. Then I tried reducing the stoploss target. This time stoploss target getting hit more times than previous one. I am unable to learn to this tactic of setting proper stop loss. Any help

1 Like

Maybe you should consider setting SL more farther away, SBI isn’t volatile scrip but having Re.1 SL for a share priced at 270 isn’t very good idea, the price have zero room to breathe, no wonder your SL is getting hit more often.

3 Likes

How did you arrive at the stop loss of 1 rupee. If you give random values for stop loss without any methodology the result will be like this only. Also please read and go through stop-loss concepts mentioned in zerodha varsity. You will be well informed next time

4 Likes

You Stop Loss is very close and the RR is inverted. Not a good way to trade! Ideally, SL should be kept where “If price arrives there then the setup has failed or the view on the stock has failed”.

2 Likes

If you trade using candlesticks patterns, then the low of pattern should be your SL.
I have lost my 50% capital in SBI due to hitting SL.
SBI usually has price movement of 6-7 rupees. Keeping SL at rs.1 is not done man.

Also SL depends on your risk management. How much capital u r willing to lose if trade goes against you.

These are basic things. LEARN more and EARN more.

Better you stop trading or increase your stop loss target…

2 Likes

Entry and Stoploss are applied based on technical analysis purely. If it is done randomly, it is very obvious to meet the stoploss every time. Its not a game of gamble an win. U may have succeed once or twice but they are mere tukka. Learn first then apply.

1 Like

Its nt a problm w sl. Its with d strategy …develop a system capable of giving atlst 1:2 rr

Always dive to risk only 1-1.5% of your capital, and calculate stop loss base on current standard ATR 2% value for intraday.

Eg.: if you have a plan to trade into XYZ stock an it’s price is at 100 with 50 quantity. and you have a capital of 25000. So maximum per trade you can bear a risk is a 250 is 1% of your capital, so you can take a risk of 250 in this trade,
ATR value is now 20 so 0.40 is a 2% of ATR value.
So now your buy value is a 100 and your risk appetite is 250 of 50 quantity so per quantity it will be 5 per share (100 - 5 = 95-0.40=94.60) so now your stop loss is 94.60.

Complicated method, isn’t it? If one is wrong loss is 270 not 250.

Timing and direction identifying for a trade is vital. Then comes stop loss. First test your decision to trade direction is successful at least 50% of the time.

1 Like

Thanks Guys. I will do my study again

You are trading in a wrong way. Target should be higher than s/loss (1:2 is better).
For script like SBI, you should maintain s/loss of at least 1%.

1 Like

I don’t understand this risk:reward ratio. If I have 1:2 risk/reward ratio, SBI never reaches this reward of 2 % at all. somehow, I am trading in wrong direction. Even though I see clearly the trend, I take countertrend when it is retracing. I mistake that retracing as reversal and then take the trade.

1 Like

Dear, SBI is not very volatile stock. It moves considerable only on some news.

To help you & all others, I am providing a better way to earn money.

A site is providing free screeners (auto-fresh). Visit it & trade only in “ABV 200 SMA” stocks.
Keep watch on it & BUY @ next green candle, when you find stock in the list.


DEAR ZERODHA, I AM NOT ADVERTISING ANY SITE & I AM NOT CONNECTED BY ANYWAY.

2 Likes

Thanks Maharaj

Look your SBI ! Today from 305 to 317 !!

1 Like

I have been watching since it touched 295. I kept watching. it went to 300. I was skeptical whether it will further move upward. I have been only watching. I couldn’t make an entry becoz in the beginning of the day, I lost Rs 3000

Dear ZERODHA, Why there is no “LIKE” symbols with my posts ?

Stop day trading and start cnc…buy on declines and sell when suitable