One of the main goals in investing is to have your assets create a profit. Savvy investors use a combination of tools and knowledge to make sure this happens as efficiently as possible. For investors who have definite goals in mind and wish to achieve them, a trailing stop loss order can be the right vehicle to these achievements.
Here are 3 ways to know if a trailing stop loss order is right for you:
- You tend to linger over selling an investment. If you frequently hold onto stocks for too long, thinking they’ll rebound, but they usually don’t, you may benefit from a trailing stop loss order. Since this tool automatically triggers the market order to sell the stock if it hits a certain price point, you won’t have to agonize over whether or not to manually make the sale.
- You want to take advantage of the flexibility. If you happen to be correct that some of the stocks you hold onto will find new life, as long as they don’t fall below your stop loss limit, you can benefit from the profit protection. As the stock prices rise, if you use a trailing stop loss order your limit will rise with them. You can then maximize the profit you earn on each share.
- You don’t have time to place manual orders. Unlike a stop loss order, which has to be manually adjusted, trailing stop loss orders automatically adjust according to the fluctuations in the stock prices. This eliminates the need to watch the performances constantly.
Investing is full of risk and uncertainty: this is part of the allure of the stock market. Anxiety doesn’t have to be a great part of that process when you determine using a trailing stop loss order is the best way to enhance your investment strategies.