Definition of stoploss and its various types

Stop loss order or sometime referred to as a conditional placement can be broken into different categories based on a traders requirements.

How stop loss is useful?

Emotions should never play a part in one's investments. When you invest a certain amount and have your target set, you should exit when your target is achieved. In the same case, you should exit when your stop loss condition is also met.
Stock market is all about emotions but an intelligent investor should never get into that trap.

The various types include:

Sell SL Order: This conditional order is the most common of all stop orders and is used in the traditional manner of selling a financial instrument at a certain price when holding a long position in the same instrument.

Stop Limit Order: A unique type of stop loss, whereby a purchase or sell price is set in the system as a limit order. If the financial instrument does not reach this price, then the order will not trigger. Many professional traders and institutions utilise this form of stop as it ensures a quick fill at a predetermined level.
>>Buy SL Order: The reverse position of a sell stop loss order. If the trader is short a position, then this type of stop loss would be used to manage their risk appropriately by setting a buy out (close) level.

Trailing SL: Increasingly becoming popular with the trading community, the trailing stop allows the trader to set a dynamic exit level on a position. As the position moves in favour or profit, the stop loss level will continue to track and will only close out when the instruments price changes its trend.

Trailing Stop Limit Order: Like the stop limit order, this strategy tracks the price of the financial instrument and will adjust the long or short execution price based on the trend. This form of order is quite sophisticated in its makeup.

Bracket Order: The bracket order combines the trailing stop and the trailing limit in one package. The trader can go into the position defining both the trailing limit to open a position and the exit position for this order when it executes. These strategy is the most dynamic, allowing the trader to set their parameters without having to monitor on a regular basis. Setting adequate stop loss orders in forex are extremely important. As it is a leveraged product, the fluctuations in pricing can be quite significant on a daily basis.

Recent economic and monetary policy changes have spurred a new wave of volatility in the markets and will continue to cause uncertainty. SL orders are a fantastic way to manage appropriate risk and keep within your own personal trading guidelines and rules.

Author Bio:
I work as technical analyst for one of the stock market india company which provide trading tips, intraday tips, btst share tips.