On my flight back home , I witnessed a very common scene… The charming Air-hostess was giving Pre-Flight Safety Demonstration… there were about 10 people in the Premier Class. Some were busy checking out the menu, some were searching for news in the paper and some outside the airplane. My co-passenger was busy snoring away to glory……..as for me I was equally guilty … I was busy admiring the dedication and confidence level of the hostess…. it takes a lot to talk to people who are there…. but still missing.
Another scene witnessed on daily basis … especially in Mumbai … two wheeler riders riding without helmet. Especially on Sunday Evenings …. helmet clad riders are a rare scene. Even though , am sure most would understand that the law concerning wearing a helmet is in the rider’s interest , still the traffic police have to maintain the status of a chiding mother to these riders.
Taking cue from the situations discussed, we also witness similar conditions in the Stock Markets. If you ask anyone , the rules for making profit in Stock Markets… the top of the mind recall will be STOP LOSS…but it is more often used for giving ‘Gyaan’ rather than for trading.
There are a huge number of books on successful trading …. and a small number of successful traders…. the reason …STOP LOSS
Even though the Research Calls provided to Traders come with a Strict STOP LOSS and if Traders play by the book, the probability of getting a good return is decent. In reality, we are very optimistic by nature …. on one side , we eagerly await the prices to show that favorable spurt , on the other side …. we do not put a STOP LOSS to our trades … as we believe that it may get hit, Even with the best of research abilities and state of art technologies , high strike rates of calls is possible, but a 100% strike rate is impossible …..hence the need to Stop Loss via STOP LOSS.