Stop-Loss Order trading as a safety net ?

[Mr Nice]

Anybody use Stop-Loss Order trading as a safety net to avoid a big market correction ? When I sell stocks I always use a Limit Order with 'Good Till Canceled' date usually 30 days... and on a few occasions I've used Market Orders if I want to get rid of something ASAP and take my profits.

 

[Kuato]

Though I usually buy to hold, if I am watching a stock I will use a stop loss to protect my profit, typically following the climbing price by about 2-3 dollars per share.

 

[Warstud]

Yep....I prefer to buy stocks at support and then put a Sell/Stop order a tad below that support. I may even put a Buy/Stop above resistance on a stock.

 

[fdcg27]

Originally Posted By: LT4 Vette

Anybody use Stop-Loss Order trading as a safety net to avoid a big market correction ? When I sell stocks I always use a Limit Order with 'Good Till Canceled' date usually 30 days... and on a few occasions I've used Market Orders if I want to get rid of something ASAP and take my profits.

Unless a stock is really tanking, market orders work well. If a stock price is falling out of the window, it's doubtful that a stop loss order will help, since it'll be executed at market as quickly as it can be after your lower limit price is reached. There are no guarantees that the order will be executed at the specified share price. For the small investor, stocks should be selected for long term potential and held. Trading is rarely a sucessful strategy over time, although you will hit the occassional home run.

 

[Doog]

I use market orders for all trades. If I decide to sell...then I sell. But I do better holding and play 3-5 year trends only.

 

[Andy636]

It's always a good idea to have a SL set. When you are in the green you could always move the SL at BE (brake even)...just IMHO