Do you find yourself helpless to avoid taking an additional trade? Does the greed of profit allure you to invest in share market for more than what you had initially planned? Most traders and investors have admitted that a major portion of their untold stories of losses was due to their inability to stop themselves from taking extra trades. The moment the price of their stock drops below their buying price, they are pinned with the hopes that it will rise again. Ultimately, irrespective of their patience, some stocks do not have an upside movement for quite some time and keep having a downfall.
While the right choice of stock plays an important role, the skill of exiting any trade on a set target or stop-loss, irrespective of the circumstances, takes the biggest piece of the cake. With technological advancement, every leading trading app in the market offers investors and traders the option of stop-loss and setting targets. However, some applications go beyond the ordinary and offer more features that benefit the trader and help them from making any hasty decisions. These features are bestowed in the form of user-friendly control options that take charge of your trades.
Making an investment decision is a tedious task resulting from meticulous analysis, emotional attachment, diligent consideration, etc. However, the difficulties evolve after taking a trade, as the market’s volatility, the anticipation of making a profit, and the fear of the price movement in an opposite direction halts our senses. In these circumstances, trading controls become a boon for traders who yearn to resist taking a new trade or making a mistake in an existing one. Below are a few pointers that explain the significance of these controls through your demat account.
- Risk-Reward Concept
Financial markets are not all about making profits but also about losses and the risk involved. Several investors and traders fail to consider the risk-reward ratio before diving into any of the trades. However, with the trading controls, such as stop-loss, target options, etc., provided with every trading account, it becomes convenient for users to comprehend the risk involved in their trade while overcoming their greed and selling their trade at the predetermined target.
- Stop Loss
Every technical analyst would use a stop loss price that becomes a self-explanatory indication of selling the stock as it may experience a downward fall. Some traders mentally note a stop-loss while being oblivious or ignorant when the push comes to the shove. Their intuition and greed force them to avoid selling their trade and wait in anticipation for the stock to rise. In such cases, having a stop-loss option immediately helps traders adhere to their initial mindset.
- Instilling Patience & Discipline
Patience and discipline are considered to be two strong pillars of successful stories of investments. These virtues are difficult to learn and more complex regarding their implementation in the financial market. However, these controls help a trader to understand the benefits of being patient and disciplined while taking a trade.
With a recurring pattern of using these controls to your aid, you can see a subsequent reduction in your losses as you learn to trade with patience while also being disciplined in your actions, irrespective of the market’s volatility.