Some words in trading always confuse people who are new or not from finance background. Many people when they start doing intraday trading they always hear that price is triggered and think what is Trigger price in intraday Trading?
We are going to discuss trigger price and some other related terms to it in this post.
Table of Contents
Introduction
Intrday Trading is not quite easy for new traders and specially when they are not aware about the strategies of doing it. However, To understand the strategies you must know the terms which are used in the strategies.
Thus before leaning the strategies you must learn basic terms related to these strategies. To understand what is Trigger price in intraday Trading? First we need to gain knowledge about stop loss.
Stop loss
A stop-loss order is a future order to sell a securities when it hits a certain price level. It is used to limit an investment’s loss or profit. The definition can be applied to both short and long-term investing.
An individual puts an automatic order with the financial advisor by offering a specific price of brokerage. Stop-loss is often referred to as a’stop order’ or a’stop-market order.’
When an individual places a stop-loss order, the broker/agent is instructed to sell an asset when it exceeds a pre-determined price limit.
Examples
If trader X wish to buy stocks of ABC firm at a specific price, he or she will place a GTT or tell his or her brokerage to put a limit on the share buying. When the share price surpasses the defined bidding cost an order to buy it is immediately placed.
If you currently own stocks of firm ABC and would like to sell them, you will place a 2 Legged GTT or instruct your broker to do so when the price hits the same maximum or lower. As a result, if the price level meets the set limits, an immediate order will be placed.
Importance of Stop Loss
- A stop-loss order is a technique that is utilized in intraday and to schedule short-term investments.
- It ‘s is also useful for an individual who doesn’t want to be bothered with daily tracking of a security.
- The trade is performed immediately, and the trade limitations are set ahead of time.
- This can be extremely beneficial for Intraday traders and small investors for there risk management.
Now let’s talk about the main topic Trigger Price.
What is Trigger Price?
Trigger price is included in a Stop Loss order. You must enter two types of prices when placing a Stop Loss order: Trigger Price and Limit Price.
When the level of a stock reaches or exceeds the Trigger Price, your Stop Loss order is triggered. The order is completed at the limit cost you specified.
So the value at which your order of buy or sell will be activated to complete by the exchange platform is called Trigger Price.
Trigger Price example
For instance, if You buy 20 stocks at a rate of Rs 200. You will place a Stop Loss order to limit your losses if the stock price falls. The limit cost is Rs 185, and the trigger value is Rs 190.
The platform will now position a Sell order as early as the stock value hits 190 or falls under that level. When the stock value crosses Rs 185, the order will be performed.
Summary
Intraday Trading will be more easy if you understand the terms and strategies related to it and Stop loss & trigger price are extremely important for intraday traders.
We hope we are able to explain What is Trigger Price in Intraday Trading? Let us know your views in the comment section
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FAQ
Trigger price in share market in hindi?
जिस मूल्य पर आपके खरीदने या बेचने के आदेश को पूरा करने के लिए सक्रिय किया जाएगा उसे ट्रिगर मूल्य कहा जाता है।
stop-loss in stock market meaning
A price on which you want to buy or sell a stock which you are holding or entered in a intraday position.
Trigger price meaning in marathi?
आपली खरेदी किंवा विक्री ऑर्डर पूर्ण करण्यासाठी ज्या मूल्यानुसार सक्रिय केले जाईल त्याला ट्रिगर किंमत असे म्हणतात.
Benefit of Stop loss?
The main benefit of stop loss is that it help in risk management of intraday trader or short term investor.
Stop loss trigger price is related to each other?
Actually Trigger price is included in stop loss order.
