stop loss

the23rdday

Hi , I am new to Boards.ie and am new to Investing. Can someone tell me how I can put a " stop loss " on when I buy shares using an execution only online broker. (a) at the time I buy the shares and (b) at a later date . Many thanks

strmin

By using stop loss you take a huge risk of selling shares below your wanted price. I never used it and never will. Just see what happened on 6th of May!

About how to put a stop loss you should read FAQ on your broker's website or watch tutorial. I'm sure the answer is there. It is as simple as placing buy or sell order.

Smcgie

the23rdday wrote: »

Hi , I am new to Boards.ie and am new to Investing. Can someone tell me how I can put a " stop loss " on when I buy shares using an execution only online broker. (a) at the time I buy the shares and (b) at a later date . Many thanks

23rdday, the best advise i can give you is to set up an online platform like TDwaterhouse, selftrade etc and explore the stop loss system.

Here's a link to a video demo on how to set up a stop loss via TDW platform:
http://www.tdwaterhouse.co.uk/order-demo.cfm?tab=4

silverharp

everybody will have a different opinion on this one, but I have never used them on shares, the secret is not to have an oversized position in one stock. You should probably have a mental stop in place and review when the market closes on a particular day. Clearily if the trend for a stock changes you have to know where to lock in profits

I would use them on futures as it could go seriously wrong otherwise.

the23rdday

Many thanks - I looked at the Waterhouse vidio and this seems to show how a stop loss works but assumes you already know how to put a stop in the market . I' m still a bit at sea as I don't know how to actually do this. Regards and thanks

Bullish

The23,
I think everyone is pointing you to NOT USE THEM.
As Strmin pointed out, If you had a stop loss in place on May 6th you would have sold way below you stop price.
Also if a stock Gaps down due to overnight news you will automatically sell at the lowest point on the open the following day.

Try to study the Cycles in a stocks price and learn the support and resistance levels.

http://www.informedtrades.com/f111/

the23rdday

Thanks Bullish , Yes May 6th gives me the shivers but there should be some way to lock in profits !!! Anyway if I was silly enough to want to put a stop in the market with an online broker how do I do this ?? This was my Query . Many thanks for your time.

bosra

+1 ...always have an entry and exit strategy when trading. Be it a mental or real stop. Stick to it. Especially if you are using leverage.

silverharp wrote: »

everybody will have a different opinion on this one, but I have never used them on shares, the secret is not to have an oversized position in one stock. You should probably have a mental stop in place and review when the market closes on a particular day. Clearily if the trend for a stock changes you have to know where to lock in profits

I would use them on futures as it could go seriously wrong otherwise.

Bullish

The23,
As i dont know your platform I cant tell you exactly, But normally look at your portfolio of stock and enter a trade for the stock you want to "protect". Set a stop loss order at what ever price you want and execute the trade. If the stock falls below the price you entered you will automatically be taken out of the trade at what ever bid is on the stock at that time.

http://www.investopedia.com/terms/s/stop-lossorder.asp

the23rdday

Thanks to all. I suppose all systems are different and none perfect .The 6thof may would have effected investors with stop losses in different ways, some would have sustained bigger losses than others,some would have lost unrealised profits . Of course we are looking in hindsight and I suppose the market could have paused for a while and then fallen further not to recover to any great effect , who knows?? Once again many thanks to all

Idu

If you are looking at using a stop loss then I wouldn't be worrying about the 6th of May when making your decision. It was a freak occurence that might happen once every couple of years. It's just one of those intangibles you really can't account for

Bullish

Very true Idu, But individual stocks gap down all the time
POZN plunged from 12 to 5 dollars in minutes and back up to 11 again only 2 weeks ago.
Nothing worse than getting stopped out at the low only to see the stock recover. I suppose its all just individual risk tollerance
Happy trading