Trailing Stop Loss Orders are a great strategic tool to help investors minimize losses and recognize higher profits. You set a price that you don’t want your stock to go under and if/when your stock gets to that price, an automatic notice will be sent to the broker to sell that stock. That’s what helps you minimize losses. By the same token, if the price of that stock increases, with a Trailing Stop Loss Order, the low price you set for the stock not to go below increases with the stock price automatically. This raises the price you set to flow in tandem with the price increase, which helps maximize your potential for more profits.
Traders that are new to the stock market process can be at a
disadvantage until they fully learn how the wheeling and dealing of the system works.Like anything else, experience is an advantage. The more time a trader has spent practicing his/her job, the more knowledge he/she gains and can, therefore, pass along to investors to work on their behalf. For instance, a newbie trader might accidentally take up the call of a “market maker” (an experienced trader who has learned how to manipulate the bidding process) if multiple Trailing Stop Loss Orders have been placed on the same stock.When you have a large grouping of the same stock using this option, a newbie trader could mistakenly sell too early to a market maker, which in turn, could push the price of the stock in the opposite direction you want it to go. This would give another investor the opportunity to purchase several shares of stock at a better deal than would have been possible.
Four Pitfalls That A Newbie Trader Might Make
When anyone starts a new job, he/she naturally wants to do well right away to prove themselves and that they are a good fit for the position. They also want to make the most money they can. In the case of market traders, that amount relies on how they “play” the stock market game. These four pitfalls are common to newbie traders:
- The fear of losing a sale and/or money on a deal;
- The need to be right – to prove themselves;
- The desire to be rich – as quickly as possible; and
- They haven’t learned to be disciplined with their trading strategies yet.
StopLossTracker can remove some of the emotional and psychological worries of dealing with new traders by utilizing a tool with a method that is designed not to let you down. Start a free trial today.