Just spent time on Gemini learning about the differences between stop losses and stop limits and then I was like, how do I know what price to put it at. This is solid info, thanks
The one additional thing you might want to point out to your subscribers is the tendency of market makers to run the stops out and then take the stock back higher. This can be managed by placing a stop loss order with one share - or I like to actually place a buy order for one additional share - and then evaluate the situation at the point in time that buy order executes.
Very important for traders and investors to understand. I would only add that it's also important to trade liquid assets and on brokers with deep liquidity, otherwise in volatile events the loss could be significantly higher than the pre-defined stop due to slippage.
Just spent time on Gemini learning about the differences between stop losses and stop limits and then I was like, how do I know what price to put it at. This is solid info, thanks
Thank you for reading and your comment Jake!
The one additional thing you might want to point out to your subscribers is the tendency of market makers to run the stops out and then take the stock back higher. This can be managed by placing a stop loss order with one share - or I like to actually place a buy order for one additional share - and then evaluate the situation at the point in time that buy order executes.
Do you set stop orders to fill outside of regular trading hours?
While they may exist, I don’t know of any brokers that facilitate stop loss orders that are valid outside of regular trading hours.
Very important for traders and investors to understand. I would only add that it's also important to trade liquid assets and on brokers with deep liquidity, otherwise in volatile events the loss could be significantly higher than the pre-defined stop due to slippage.