You buy a stock. It goes down, now what? Message Board

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Strategies & Market Trends : You buy a stock. It goes down, now what?

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To: Investor2 who wrote (17)	7/7/1998 4:19:00 PM
From: The Ox	Read Replies (2) of 112

I agree, do not eliminate stop losses as a method of protecting downside losses. I think one of the most important issues when considering stop losses is to balance your risk tolerance level with the normal volatility the stock shows. Some tech stocks show much greater swings on their chart then others. If you find yourself buying into a stock with large swings, then you need to consider greater % stops. 10 to 15% may be fine for some equities, but others may require 20 or 25% just to handle the normal/possible volatility. This should be taken into consideration before buying highly volatile stocks. Can you wait out a 20% drop? Is this within your risk tolerance level? Just my 2 cents. Great idea for the thread. Michael

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