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Strategies & Market Trends : Underexposed Technical Analysis
AQN 5.965+0.2%Nov 24 3:59 PM EST
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To: robert b furman who wrote (767)2/16/2020 3:42:36 PM
From: Underexposed  Read Replies (1) of 914
 
I will say this again....I DO NOT use ordinary STOP LOSS orders. These are market orders that can be abused.

I DO use LIMIT STOP LOSS orders....by this means I set a loss target that I am willing to live with and a Limit for which I will accept as an order to sell

So a LIMIT STOP LOSS order for stock ABC currently @$6.00 might be for a target of $5.00 with a limit of $4.75. Therefore the order while declining would be active only in the range of $5.00-$4.75

If the share price falls below $4.75 the order is not active any more and any shares not sold in the range of $5.00-$4.75 remain in my possession unless the price rises into that range again.

I can then cancel the order if the stock plummeted through that range and usually there is a rebound where I can decide whether or not to sell or set a different LIMIT STOP LOSS and potentially follow a pullback as far as I can.

A SIMPLE stop loss creates a market order to sell and you can get really fleeced by it selling at the bottom and you helplessly watch the stock rebound.

I have actually used a LIMIT STOP LOSS in this thread which illustrates my point. It was with the selling of Seaspan [SSW]

Use of LIMIT STOP LOSS in sale of Seaspan

Please don't make it sound like I use ordinary Stop-loss orders...Actually when buying a stock I use limit buy orders as well...I rarely use a market buy unless it is a runaway stock in bullish mode and I want it at any price.

UE

PS: Perhaps you don't have a Limit Stop Loss option in the USA
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