What is the order of stop-lifes?

In Finance, the order is a stop-loss order with a stock broker to automatically sell the investment in the share if the stock price falls to the set price. The main objective of the stop-lines or stops, as is sometimes called, is usually to control the loss of investors and protect the investor from steep drops of stock prices. An experienced investor can buy shares to achieve a certain percentage profit and may also have the limit for the loss prepared for the risk of shop. The order to stop the loss allows the investor to control the amount of the potential loss it would bring in the store if the stock price dropped. The order of mediation for the loss of a stop usually does not represent any additional fees beyond those that the investor usually pays for their business in the stock market. Due to these advantages, stop-lines are often recommended for beginning investors as a very important tool to reduce potential losses.

as well as limiting losses, an order stop-loss can be used to lock profits. If the investor has bought a share at a particular price and the shares then increased the value, it can set the stop-lines of lines at a point lower than the current market price, but higher than the original price at which the investor bought the shares. When the stock price continues to grow and the investor shifts his / her order and the price is called the end stop.

There are some limitations and disadvantages that can be used when using stop-losses. It is important that the investor has some knowledge of short -term fluctuations, which is likely to experience the share to allow them to maintain an investment on a longer term. For example, if a highly volatile share usually fluctuates by 5% daily, then stopping stops if the stock drops by 4%, it may not be a suitable strategy.