Day trading in Canada Message Board

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Gold/Mining/Energy : Day trading in Canada

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To: Wizzer who wrote (1573)	11/25/1998 8:03:00 AM
From: the Chief	Read Replies (1) of 4467

Hi Wizzer. Excellent stuff!! Just one addition to the "Stop". There are two types of "stops". A Stop Loss which we all understand provides an "out at a specific price". There is also a "Stop Limit". In fact a Stop Loss is a word that is coined from the Stop Limit! Stop Limit Order and when I use it With a Stop Loss you want "out" as soon as the price hits your stop and as Wizzer says, you order is then converted to a market sell. With a Stop Limit you can place a stop at $5.60 with a limit of $5.40. What this does is limit your selling price downside. There is also an inherent risk to this which I will go into. In the example above the stock is automatically put on the market as a market sell but is withdrawn when the stock breaks $5.40 downward! You, in effect provide a window in which you will sell. Downside If a halted stock tanks badly on a News Release and opens below your stop limit then you still hold the stock!! ie. If the stock opens at $5.39 and falls to $2.00 you still own it!! Upside You own a stock that you truly like. You believe its low value is $5.40 and wouldn't on the worst day accept less than this isolates you from market panic. There are a couple of stocks that I daytrade that I would gladly transfer from my daytrading acct. to my longterm acct. rather than sell them at a discount, so I always use stop limits!! last Point When you first start daytrading, daytrade stocks that if caught with you would have liked to own anyway. Anxiety level is far less and you are daytrading stocks you know....First year of daytrading, if you break even! You are going to be a good trader!! the Chief

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