Some tip providers suggest buy price above current price. Why is it so? Eg. tata motors running price 100 some signal provider advice buy it above 102, If want to buy why reduce profit less 2.
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First thing do not follow tip providers.
Any ways to answer your question, the reason they suggest to buy above certain price is because that price level could be some sort of resistance (may be prior swing high, some mov avg etc). And a confirmed move above that level signals Breakout. Unless price breaks above that decisively, there is always a possibility that it could retrace back.
In your e.g. May be Tata Motors has resistance at 102. So when the price reaches 100 either it can keep moving up or it may retrace back after reaching any where below 102 levels. But once it crosses 102, probability of it continue to keep moving increases and risk reward also becomes favorable. Here SL could be if price comes back below 102 e.g. 101 - so the risk would be just couple of points while reward could be next resistance level.
Having said that, there is always a possibility of a false breakout.
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