Use stop-loss orders to protect your
investment.
Nothing can ruin your overall
portfolio return that to have one stock that you end up losing most
of your money. Depending on your taste of risk tolerance, you may
want to modify your worksheet to meet your trading requirements.
A Sell Stop Limit Order is an order that combines
the features of a Sell Stop Order with those of a limit order. A Sell
Stop Limit Order will be executed at a specified price (or above) after
a given stop price has been reached.
Once the stop price is reached, the order becomes a Sell Limit Order,
filled at the limit price specified or higher.
Example: Suppose you own 100 shares of SPDRs SP-500 (SPY) and you are
looking to sell them if the stock's price falls a bit lower. Assume SPY
is currently trading at $145 per share. You place a Sell Stop Limit
Order for $141 on SPY, with a Limit (minimum you're willing to accept)
at $140.
Suppose SPY then proceeds to trade down to $141. At that time, your
order would become a Sell Limit Order and your order would be filled at
the next best available price as long as the stock still trades above
your specified limit price of $140.
The main benefit of a Sell Stop Limit Order is that you have some
control over when your sell order will be filled and you have set a
minimum price you are willing to accept to sell your shares.
As with all limit orders, there is no guarantee that your order will be
filled. If the stock price does not reach your stop price, you will not
be filled. In addition, if the price hits your stop price, but then
trades below your limit price, you will not be filled..
Stop/Limit Exit: the price we
want to exit a position. When the price gets triggered the
position is sold at the stop price. The limit price will prevent the
order to execute, should the stock price falls lower than you want
to sell the equity.
Raise Cash:
most correction are between 5-7%. (see
profit
target). I also raise cash when the market is trading sideways.
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