Trailing Stop Loss Orders by their very nature take away some of the emotional tendencies felt when looking at an investment picture where stock prices rise and fall frequently. You might get excited, wring your hands, and wonder what to do. Making those momentous decisions about when to buy or sell a stock can leave you anxious and frustrated, undermining your ability to make sound financial decisions. When you set a fixed price (a percentage) of an amount that you don’t want to lose above, you can rest easier knowing that you won’t lose more than a certain price point on a specific stock.
Learn To Be Disciplined
It is difficult to be “unemotional” when dealing with stocks, especially the ones that tend to have wide fluctuations in prices – often. One look at a stock trading floor will tell you it can be a tumultuous business. How does anyone know who’s talking to who? Who’s selling what? Who’s buying what? Who has the best price? It can be an emotional roller coaster. That’s why you need to set Stop Loss Orders, or even better Trailing Stop Loss Orders. These orders stop you from losing any more money than you are willing to risk when trying to attain a profit.
Establish An Exit Point
Trailing Stop Loss Orders allow you to set an appropriate exit point for your
investing style and needs. When doing so, you are guaranteed that the
money you invested won’t go below the price point you have set.Trailing Stop Loss Orders continually adjust themselves if the price of the stock should increase, thereby adjusting your price point as well. Establishing the correct exit point for you can be difficult. You must decide how much loss you can sustain,while trying to reach for greater profits. You might set your price point looking at technical or fundamental criteria which include the methodology of “Consolidation.” This refers to the stock’s price landing within a pre-determined pattern of trading levels.
Trailing Stop Loss Orders help keep the emotional and psychological factors which might be influencing your price point decision to a minimum. Try StopLossTracking today; it’s free for the first 30 days.