Supports: Markets move in wave. There are no immediate falls nor rallies. There are waves. The local waves or Short Term waves happen every minute. The basic waves happen on positional basis. The supports of these waves are called long term supports. There are intermediate pullbacks and downfalls happening around medium term or intermediate supports.

Stop Loss:

Decide the time frame for which you have taken a trade. Do not attempt to alter your time frame in between the trade. Always exit once if your stoploss hits. Exiting stop loss is an art. You need not to panic immediately and exit, rather you should wait for 2 3 minutes, and exit on a local rally (means a normal 0.5 – 1% up and down happening in every minute). Once it hits, you can enter again on next support. If the support levels are known, its ok, if not, then ask your advisor. To recover the stop loss money, you may even short the stock below stop loss level.

Always wait for 5 minutes before deciding that stop loss has hit or not hit. Because there are panic sellings which happen only for a few seconds. Do not sit idle, if you are long in fut, then you may short next month fut, or you may short in cash (say 50%) to hedge against. Generally, if your stop loss hits, you still will see it pulling back, but it will not cross more than 0.5% from the stop loss levels. For example: RCOM had a stop loss of 780 levels, once it hitted, it went to 778. It went up to 781 and then crashed to 730. Reason: THE SUPPORT BECOMES A RESISTANCE ONCE IT BREAKS.