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Investing/Strategies / Short Term Trading
|Subject: Re: Stops, stops, stop it!!!!!!||Date: 6/28/2001 10:36 PM|
|Author: sonar69||Number: 6414 of 36686|
A stop on a stock you are long on is placed below the purchase price.
A stop on a stock you are short on is placed above the sell (short) price.
The purpose of stops is to protect your money. If you bought XRA at $8.80 a stop placed at $8.10 would sell the stock if it falls to $8.10. This is a 8% stop excluding commissions and fees. What I do for a long purchase (most of the time) is set a stop at 8%. If the stock moves up, I move the stop up (a trailing stop). As the stock moves up, the amount betwen the stock price and stop price widens from 8% to what ever I feel is correct.
Stops are one of the most important tools to use. Preserve capital.
A sell limit is placed above the purchase price. I cant set a sell limit and a stop at my broker, so I would set the stop.
I do, at times, not use stops.
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