To set a stop loss in Zerodha, you can follow these steps:

Log in to your Zerodha account.

Navigate to the "Positions" tab from the dashboard.

Select the position you want to set a stop loss for.

Click on the "Exit" button on the right side of the position details.

In the "Exit" window, select the "SL" (Stop Loss) option.

Enter the trigger price at which you want the stop loss order to be executed.

Set the stop loss order type as "Limit" or "Market."

Set the stop loss order validity as "Day" or "IOC" (Immediate or Cancel).

Click on the "Place SL" button to submit the stop loss order.

Once you have submitted the stop loss order, it will be executed automatically if the trigger price is reached. The stop loss order will help you limit your losses in case the market moves against your position.

Zerodha is a popular online trading platform that allows users to buy and sell various financial instruments like stocks, derivatives, and mutual funds. One of the key features of Zerodha is the ability to set a stop loss order to minimize losses in case the market moves against your trade. In this article, we will explain what stop loss orders are, how to set them in Zerodha, and some best practices to follow while using them.

What is a Stop Loss Order?

A stop loss order is an instruction to sell a security when it reaches a certain price level. It is used to limit the potential loss on a trade by automatically closing the position if the price moves against the trader. For example, if you buy a stock at Rs. 100 and set a stop loss order at Rs. 90, the trade will automatically close if the price falls to Rs. 90. This means that your maximum loss will be Rs. 10 per share.

Types of Stop Loss Orders

There are three types of stop loss orders that you can place in Zerodha:

Market Stop Loss Order: In this type of order, the trade is executed at the best available market price when the stop loss price is triggered. This means that the price at which the trade is executed may be lower than the stop loss price if the market is moving rapidly.

Limit Stop Loss Order: In this type of order, the trade is executed at a specified limit price or better when the stop loss price is triggered. This means that the price at which the trade is executed will not be lower than the stop loss price, but it may be higher if the market moves in your favor.

Trailing Stop Loss Order: Trailing stop loss in Zerodha is the type of order in which the stop loss price is set at a certain percentage or rupee amount below the current market price. The stop loss price will move up as the market price moves up, but it will not move down if the market price falls. This allows you to lock in profits as the market moves in your favor while limiting your losses if the market reverses.

Best Practices for Setting Stop Loss Orders

Here are some best practices that you should follow while setting stop loss orders in Zerodha:

How to place stop loss order:

Set a realistic stop loss price based on your risk tolerance and trading strategy. Avoid setting too tight stop losses that can be triggered by minor price movements or too loose stop losses that can result in significant losses.

Use trailing stop loss orders to lock in profits as the market moves in your favor. This allows you to ride the trend while limiting your losses if the market reverses.

Avoid setting stop loss orders too close to the market price, especially during high volatility periods. This can result in stop loss orders being triggered frequently, leading to unnecessary losses.

Monitor your stop loss orders regularly and adjust them if necessary based on market conditions. Avoid setting and forgetting stop loss orders as market conditions can change rapidly.

Trailing stop loss is a type of order that allows traders to set a stop loss at a certain percentage or value below the market price. The stop loss value is then adjusted automatically as the market price moves in the traders favor. In Zerodha, a trailing stop loss order can be placed using the Kite trading platform. Here are the steps to place a trailing stop loss order in Zerodha:

• Log in to the Kite (Zerodha kite login) trading platform.

• Select the stock you want to trade.

• Click on the "Buy" or "Sell" button to initiate a trade.

• In the window of orders, select "Trailing Stop Loss" as the type of order.

• Enter the stop loss trigger price and the trailing stop loss value (percentage or value).

• Enter the quantity you want to trade and click on "Place Order."

• Once the order is placed, the stop loss value will be adjusted automatically as the market price moves in your favor. However, it is important to note that trailing stop-loss orders are not guaranteed to be executed at the exact stop-loss price due to market volatility and liquidity issues.