Stop Loss Dilemma!

[imaginator]

Can you guys give your opinion on this?

How many of you are in favour of stop losses?
F### how many times have you set your stop loss and the price fluctuates during the day and comes to just barely touch it, triggering your stop loss, and then it goes to the other direction that you wanted in the first place?

This is the negative side of setting stop losses = triggering a loss and wasting money on brokerage caused by temporary fluctuation.

Today I set a stop loss for AWC at 6.53, and the stock was at 6.57. It came down to 6.53 triggered my Stop loss, and then up it goes back to 6.58.

 

[Sean K]

Re: STOP LOSS dilemma!@

Can you guys give your opinion on this?

How many of you are in favour of stop losses?
F### how many times have you set your stop loss and the price fluctuates during the day and comes to just barely touch it, triggering your stop loss, and then it goes to the other direction that you wanted in the first place?

This is the negative side of setting stop losses = triggering a loss and wasting money on brokerage caused by temporary fluctuation.

Today I set a stop loss for AWC at 6.53, and the stock was at 6.57. It came down to 6.53 triggered my Stop loss, and then up it goes back to 6.58.

Your stop seems a bit close there. What % did you originally have it set at? 10% from purchase price? If so, then your stop worked! You won't lose any more money.

 

[nizar]

Re: STOP LOSS dilemma!@

Can you guys give your opinion on this?

How many of you are in favour of stop losses?
F### how many times have you set your stop loss and the price fluctuates during the day and comes to just barely touch it, triggering your stop loss, and then it goes to the other direction that you wanted in the first place?

This is the negative side of setting stop losses = triggering a loss and wasting money on brokerage caused by temporary fluctuation.

Today I set a stop loss for AWC at 6.53, and the stock was at 6.57. It came down to 6.53 triggered my Stop loss, and then up it goes back to 6.58.

U have to consider the % of the time that a stock will rebound off your stop, versus the % of the time when it protects you from a (perhaps severe) loss.

I suspect it will protect from losses a greater % of the time.

Even quantify it if you want.

A stop is only useful if it will allow you to exit from a position because the reason you have bought it is no longer there. eg. change in trend.

And maybe u need to put your stop in a not-so-obvius place?

Just a few suggestions. I dont use stops myself. Maybe tech/a or others can comment.

 

[heroboy101]

Re: STOP LOSS dilemma!@

I would never post a stop loss on a share or cfd at an arbitrary % ie I don't want to lose more than 1% so that's where I'll put my stop loss. It should always be set just below a point of support, and this should figure into your buying the cfd in the first place. An example, if the chart says there is support at $5 and you buy at $5.05, then place stop loss just below $5 BUT to me this 'set up' is not ideal and I wouldn't enter until stock was well above $5.05 (enough to show a trend away from the support level, just in case it becomes a resistance level instead). HB.

 

[MichaelD]

Re: STOP LOSS dilemma!@

No matter how you set a stop loss, there will always be the annoyance of whipsaws. However, the flip side of the coin is that trading with a rationally and consistently placed stop loss is more profitable than trading without one, and that's all that matters in the long run.

 

[happytrader]

Re: STOP LOSS dilemma!@

Can you guys give your opinion on this?

How many of you are in favour of stop losses?
F### how many times have you set your stop loss and the price fluctuates during the day and comes to just barely touch it, triggering your stop loss, and then it goes to the other direction that you wanted in the first place?

This is the negative side of setting stop losses = triggering a loss and wasting money on brokerage caused by temporary fluctuation.

Today I set a stop loss for AWC at 6.53, and the stock was at 6.57. It came down to 6.53 triggered my Stop loss, and then up it goes back to 6.58.

Hi Imaginator

Congratulations for setting a stop and sticking to it. Looks like you managed the reality as you saw it at that moment, made a decision and acted. Excellent work.

Shortterm pain is always preferrable to the longterm pain of uncertainty in most any situation in my book.

Cheers
Happytrader