Thank you for your insights, particularly on high-cap, liquid stocks. To clarify, my previous examples were meant to highlight broader trading principles rather than offer exhaustive strategies. While trading in high-cap, high-volume stocks can help reduce volatility, it’s important to remember that all factors in trading are relative.
In cases involving such stocks, tighter stop losses often mean trading larger quantities, where even small price movements can have a substantial impact. Regardless of the approach, following stop-loss rules and maintaining strong risk management practices are essential across trading. Ignoring these principles can lead to significant losses, and any trader who dismisses stop-loss adherence is essentially working against their own success. For long-term investors, stop losses may play a different role but remain key to effective risk management.
If same-day selling is not permissible under Islamic finance principles, it may be best for Muslim traders to focus on long-term strategies. While caution around same-day stop-loss orders aligns with Islamic guidelines, in practical terms, it could lead to substantial losses in swing trading. Unfortunately, there is limited updated guidance from scholars on this, despite the D+1 settlement requirement that took effect in May.
If you’re seeing consistent profits, @Bilal_Javaid, it would be great to hear your thoughts (feel free to message me). And if anyone knows of brokers offering same-day settlement, please let me know. You can reach me at 07472742259.