Question about trailing stops?

Question

Say that you put in a trailing stop at a 15% loss, the stock drops and the sell is activated... It turns into a market sale.. Does that leave you open to lose lots of money? At that point you have no control of what the stock is sold for. What if it takes a while for the trade to go through? Is this a safe method of holding on to your profits? Also, is there any rule of thumb when it comes to loss percentages? I have a stock that has so far gained 18% over two weeks.. the stock has history of only going up so far... How do I determine a good trigger price?

Answer 1

It is possible that, even after entering a stop order, you might encounter slippage, meaning your stop order may not be filled. In such cases, call your broker and show proof that you have entered such an order and was accepted by their system. Typically, they will honor that order.

This works the same for trailing stops. But be sure that the trading platform that you are using has trailing stops. Not all trading platforms has this function.

Rule of thumb for trailing stops? It depends on your trading method. I don't have a set number for my trailing stops, but look for chart patterns to trigger my stops--hard stop or trailing.

Always listen to the market. Trade what you see not what you think.

I wish you the best! http://jsforex.blogspot.com

Answer 2

yes...trailing stop loss is a tip to limit ur losses.....even if it is traded to market...it doesn't mak any big diference..it must b around ur stop loss only

Answer 3

Yes it turns into a market sale. You can't expect the broker to guarantee your stop price.  Your final sale price can be well below the "stop"... On a rare occasion it will be a few cents above your "stop".

Never get into a stock without an exit plan.  Learn "Technical Analysis";

http://www.alphatrends.blogspot.com/

Consider selling half of your position and have a tight stop for the balance.  Adjust accordingly (use the average range, support or a 20 - 40MA to pick the stop point).

Answer 4

If you're happy with your profits so far, scale out of your position.

Sell half and let the other half ride.

You've locked in a profit.