Trailing Stop Loss Orders can be extremely beneficial in helping you manage the risks of your stock investments. They are anexceptional tool that allows you to minimize your losses and maximize your profits by adjusting your stopping price point as your stocks ride the wave of highs and lows. You do need to have knowledge of how they work and how they are best used to help manage your investment portfolio successfully.
- Monitor your stocks. As they ebb and flow, you have the option of receiving weekly emails about your stocks positions from StopLossTracker. The stocks needing your immediate attention are listed first. As well, the Stop Loss Status Bar lets you view your stock investments in green and red colors. Green means your stock is doing well; red means that stock is probably riding a downward wave and it will need to be sold soon to minimize any potential losses.
- Brokers don’t place trailing stops for you automatically.
Trailing Stop Loss Orders are only put into action with your consent.
Your broker can’t automatically place a stop on a stock if you haven’t given him instructions to do so. Never assume; always make our request known to ensure clear communication.
- Understand broker’s policy on GTC orders. Good-til-canceled (GTC) stop loss orders consistently trail the stock’s price as it rises or declines. Some brokers, however, consider a GTC to expire after 30 or 60 days. You and your broker should be on the same page about this. If your broker has a time limit on orders, make sure you are aware of it and pay attention to it.
- Use 10% as a guide for stock movement. Normally, percentages are used (10%, 15%, 20%) to value the price point at which your risk of maximum loss arrives. Specifying dollar amounts, however, can also be done. What you don’t want to have happen (and what your broker won’t want to have happen) is that you place a call to him/her every time your stock goes up or down in value by 50 cents. Ten percent is considered a good guide for stock movement that will require an action. Everyone’s level of risk, however, is different; therefore, you must ultimately make that decision for yourself.
StopLossTracker can help take the constant worry out of your stock investments. Start a free 30-day trial today and let us show you how much easier, and better, we can make your financial life.