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if and when the stock goes up 15% over your purchase price, set the stop loss at 15%. At that point, it is most unlikely you will ever lose money on that stock, barring some 911 rarity, anyway. Read the IBD Investor's Business Daily newspaper, forget the W S Journal! Read IBD publisher Oneil's book, HOw To Make Money in Stocks. Learn the canslim principles, and stay out of bear markets, they hurt nearly all stocks' performance
you may not loose more than 10-15% on that stock but with the voltility and pounding stocks take when they miss earnings all those stop losses can quickley add up. 15% here ,10% on the next etc etc.
you can get whip sawed so easy in todays markets. to be honest if its not a one time thing where you are going to take a shot with a penny stock i find stop losses lose more money then you would just staying put if you still believe in the stock.. with market action effecting all stocks it doesnt matter if you sell yours and buy another or not. all ships rise and fall with the tide assuming its not something unique to your company.
some may feel better using them as a safety net but i dont.
Last edited by mathjak107; 08-14-2011 at 02:25 PM..
then stay out of it if you feel its so bad. . using a stop loss only to buy other stocks again in a bear market down turn is mindless. we arent talking individual company risk causing these drops as much as market risk. tell me your going to do that in a bull market trend and i might be a little more inclined to agree because for the most part your protecting against events to your own company in a bull market and not market risk as much.
the definition of insanity is doing the same thing over and over and thinking the next time the outcome will be different. when markets fall like they are daily only to come back the following day a stop loss is your worst friend.
to trigger a stop loss in one stock to just buy another and trigger it again is just crazy.
no wonder you found the last 2 years so bad. i know i didnt.
Last edited by mathjak107; 08-14-2011 at 02:28 PM..
nobody with any sense would be in any stocks for the past 2 years. this is a disastrously bad market.
I kinda disagree with you with being out of stock the last two years. Most people have made large profits buying stock over the past two years. You can check the price history.
If you have extra cash, I would recommend buying stocks now while prices have dipped. Even if a second dip occur, you will still have your shares. But you have to buy decent companies. The stock market, is the stock market, you have to take risk for high rewards.
if you know the stock market you realize STOP LOSSES MAKE THINGS WORSE.
if you knew they know all our stop losses and trigger them just to trigger them.
BY them meaning market makers aka jpm gs all the big players lets just say.
if you dont wanna get hosed and lose your shares for no reason then dont use stop losses.
the point is stop losses wont do anything unless you have a buy order from another party.
WHAT HAPPENS WHEN ALL ARE SELL orders. Well thats right they front run you with hft and you sell it last meaning IT WILL GO BELOW THE STOP LOSS AND from 10% loss now becomes 20-30% loss just like that.
ALSO market makers LOVE stop loss people to manipulate the markets with.
GL setting stop losses.
With all the corruption in the stock market you would have to be an idiot using stop losses and anything to give your intentions away. SO either be active at your computer trading or dont bother trading.
AS right now the stock market is in fact playing poker with the big players. Thus you cannot let them know your hand and you must try to read what the market makers want to do IF you are trading. If you are long term investor not trader then ignore all the noise and buy on dips for your favorite companies.
If you did all the research its ok you can wait it out then while the markets plays their game.
if you know the stock market you realize STOP LOSSES MAKE THINGS WORSE.
if you knew they know all our stop losses and trigger them just to trigger them.
BY them meaning market makers aka jpm gs all the big players lets just say.
if you dont wanna get hosed and lose your shares for no reason then dont use stop losses.
the point is stop losses wont do anything unless you have a buy order from another party.
WHAT HAPPENS WHEN ALL ARE SELL orders. Well thats right they front run you with hft and you sell it last meaning IT WILL GO BELOW THE STOP LOSS AND from 10% loss now becomes 20-30% loss just like that.
ALSO market makers LOVE stop loss people to manipulate the markets with.
GL setting stop losses.
With all the corruption in the stock market you would have to be an idiot using stop losses and anything to give your intentions away. SO either be active at your computer trading or dont bother trading.
AS right now the stock market is in fact playing poker with the big players. Thus you cannot let them know your hand and you must try to read what the market makers want to do IF you are trading. If you are long term investor not trader then ignore all the noise and buy on dips for your favorite companies.
If you did all the research its ok you can wait it out then while the markets plays their game.
Absolutely true. My son has taken numerous options and stock trading seminars here and in Chicago and has been told by every trader he's met you can blow right through your stops in a volatile market. Najerians on their website and TV talk about watching trends and never seeing anything until it hits. They all say the big players control the market.
Stop loss essentially telegraphs to the bots watching. You gotta watch it or stay out of it or, like everyone else says, stick to your strategy. Stop loss no insurance from what I hear, especially if the VIX has gone wild.
Last edited by Ariadne22; 08-14-2011 at 06:56 PM..
if and when the stock goes up 15% over your purchase price, set the stop loss at 15%. At that point, it is most unlikely you will ever lose money on that stock, barring some 911 rarity, anyway. Read the IBD Investor's Business Daily newspaper, forget the W S Journal! Read IBD publisher Oneil's book, HOw To Make Money in Stocks. Learn the canslim principles, and stay out of bear markets, they hurt nearly all stocks' performance
That's horrible advice and very dangerous! You should never use stop losses for multiple reasons.
You should NEVER decide to sell because you are down x%. You need to do your research on the stock and monitor it daily. If nothing major changes such as a major recall, bad legislation, a horrible earnings report etc you shouldn't sell even if you're down 70%. That's how people get in trouble during every crash and correction. Anyone can look like a genius during a bull market.
Now if you believe in stock market manipulation, you have to believe that big money can see your stop loss prices and will shake you out.
I don't think I've ever owned a stock where I was up the entire time. The majority of my stocks at some point were down at least 15% before going up. Pigs will get slaughtered remember that.
Stop losses may or may not be effective depending on the volatility of the investment. What IBD preaches applies well to to the stocks they are looking at, namely high RSI names, but stocks which will get hammered at times if they lose momentum. I do think the important piece of advice is to cut your losses and let your winners run, which is the exact opposite of what most retail investors do.
if they are losses because of the markets action i dis-agree ,there are no winners,its a crap shoot . you will jump from one issue to another triggering stop losses as you go.
if its because things changed at your company then yep sell it. but thats not what the op was saying.
Last edited by mathjak107; 08-15-2011 at 02:47 AM..
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