Pages

Pages

Saturday, April 1, 2017

What would be the Cut Loss/Stop Loss Price for Long/Buy trade

What would be the Cut Loss/Stop Loss Price for Long/Buy trade - 2nd April 2017

Taking for example for using this counter Singpost .

Purchased price @ $1.365 for 10000 share.
Total amount purchased is $13650 ( excluding brokerage fee etc)

Cut Loss /Stop Loss price depends on your risk profile.

Let say about 5% Cut Loss/Stop Loss price .
We would be looking at the Cut Loss/Stop Loss price at $1.30.
$1.365 less $1.30 = $$0.065 x 10000 share = $650.
$650 divided by $13650 = 4.76%

In this case , your Cut loss amount will be $650 which is approximately close to 5% that you could afford to loss.

Other may have a higher risk appetite and can roughly use 8% Cut Loss as a way to limit your loss.

For 8%, the Cut Loss price will be at $1.255 .
$1.365 less $1.255 = $0.11 x 10000 share = $1100.
$1100 divided by $13650 = 8.05%.

( Trade base on your own decision)

1 comment:

  1. This comment has been removed by a blog administrator.

    ReplyDelete