What is the loss of tracks?

Loss of tracks rotation are commands for losses in which the price is included in a predetermined percentage, which is lower than the current market price. The beauty of the loss of the towing stop is that if the market price increases, the price for stopping losses will increase in proportion to change the market price. However, if the market price should fall, the loss of loss will remain the same.

The use of the loss of the towing stop is a great benefit for the investor. The use of this approach to investing means that the investor is able to set the limit for the level of loss that can be triggered. At the same time, the ability to stop the stop to adapt upwards when the market is swinging upwards means that there is no limitation at all the potential to get a return. This means that access to the loss of traces of rotation minimizes the chances of loss, but does not prevent the ability to increase the value of the investment portfolio at all.

Another advantage of losing the towing stop is that the investor can set the cost of loss of stopping and then pay attention to other matters. NenFor example, it is necessary to constantly monitor the current price of shares involved in the arrangement. If the unit price per stock falls below the price of a trace loss, the order is automatically made for sale. The investor does not have to deal with the loss of more funds due to the ongoing decrease in the value of the shares.

Many analysts recommend setting a track loss for ten to fifteen percent below the current market price. This is assumed that the price paid for shares is initially up to five to ten percent of the current value of the shares. If the shares start to reduce value, the shares will be sold at the cost of loss in the end stop and the investor will lose nothing or cause a minimum amount of loss.