Stop loss is great on generally stable stocks ,, when you don't want to watch the stock and go away about your daily business, in case of say Dell last year,,if you would have bought presplit at 55 and it was hovering at 74 ,, you would put a stop loss at say 68 ,, just in case,, and you would have been safe when it dropped to 64,, as stocks like Dell, drops slowly ,, a little bit at a time.. but if you put a stop loss on fast up and down stocks that fluctuate 10 points and if you had a stop loss at say 60 on 64 stock and it drops to 45 ,, the stop loss will catch you at 45 and most likely that stock will come back to 55.. you have to use your stop loss with discration .. one with actual brokerage stop loss and your mental stop loss,, also you can do buy stop ,, in case you are short or if you are looking for uptrend alert buy on certain stocks...
Hope it helps..
Joe |
