Your financial investments are not to be taken lightly. It’s the money you’ve earned; it’s the money you plan to retire on. You need all the strategic tools and sound investment advice you can get. Stop Loss Orders can be a very important tool to have in your knowledge arsenal. Discover three tips to help you trade on the defensive.
- Have an Exit Strategy –Utilize Stop Loss Orders
- Engage in Use of Short Position Stocks
- Purchase Defensive Stocks
Stop Loss Orders
There are three main types of stop loss orders:
standard,
stop-limit, and
trailing stop.
All three are suggested especially for markets that are slowly declining. Why? They all work to reduce the risk of more loss than you can handle and they can also maximize your profits.You have to have an exit strategy and all three stop loss orders are aimed at reducing your risk and, therefore, your losses.
Short Position Stocks
At a time when the stock market may look more weak than strong, a defensive strategy often employed is the use of borrowing short position stocks. A short position, by definition, is when an investor “borrows” a stock with the expectation that it will fall in value. An investor will typically borrow an amount of shares from a broker to sell on the open market. The investor has to eventually return the borrowed stock to the broker. The goal is to borrow a stock that it is believed is going to fall in price very soon and then the investor buys it back for a price less than he/she sold it for,there by making a profit on the transaction.
Defensive Stocks
A defensive stock is one that will provide a continued dividend and will be stable in earnings regardless of how the stock market is doing. These types of stocks tend to remain stable even in times of stock market distress and they tend to perform better during recessions.
With StopLossTracker, you will have easy and convenient access to the information that is important to you, including adjusted closing prices. Adjusted closing prices are stops and stock purchase prices that have been adjusted with dividends and splits. Try a 30-day free trial today – you will be glad you did.