in share trading what is stop loss, target, book profit and stopped out?

Question

these terms come when they suggest buying or selling shares. it is not possible for me to follow them cause i cannot understand them

Answer 1

These terms are used in both buying and selling of shares.

Stop Loss: is used to limit your losses. e.g. You have purchased shares @100/- per share and you wish to hold the same in case the price goes down till 98/- but not beyond. Then you will use stop loss of 98/- (means you will sell shares @98/-) so as to limit your losses to Rs.2/- per share.

Target: is a price you decided as selling price (in case of purchase) e.g. you have purchased @100/- your target price can be 103/- or anything above 100/-

Book profit: when you actually sell the purchased shares with profit or purchased shares you have sold earlier with profit.

Stopped out: simply your stop loss was activated and the trade was executed @ stop loss price.

Answer 2

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