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I am a relatively new investor (6 mos). I have noticed the rather large swings in price that some of my holdings have experienced. Therefore I decided to protect positions with stop losses.

However I have had several executions that have made me feel that the stop loss acts like a red flag inviting a raid on my position rather protecting it. The latest ocurrence was today.

My stock closed at 19.36 yesterday. I put a stop loss at 17. My position was sold at 16.64 and closed at 17.05. This sequence has happened to me several times: I have not received the protection that I expected, and worse, find that I have lost a position that has rebounded.

Clearly I need an explanation and some advice.
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What you probably are thinking about is a stop limit order, and not simply a stop loss. A stop limit works exactly like a stop and a limit combined.

So, essentially, you set a stop limit at $17. If the stock hits that mark, it will only be sold at $17 - you won't take anything less than $17. Beware, however, that if the volume on your security isn't that great, you may not be able to execute that limit order.

And I agree...stop loss orders often make you feel you've been robbed.

-Chris
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