Stop Loss Strategy

agupta · #1 7th October 2006, 11:51 AM

How should one deal with stop losses? I know its a very relative question as everyone trades differently but my limitation is that I can't sit at the terminal the entire day and so cannot track the scrip minute by minute. If I put a trigger to sell the stock when it hits stop loss, most of the time, I find that the closing has been higher than the stop although to be fair, sometimes the scrip does take a fall which works out in my interest but that happens quite rarely, atleast to me. If I don't put a trigger and the stock falls, then I am stuck with the bugger until it reaches atleast my buy price and in doing so miss out on other opportunities. Talk about a Catch-22

. Anyway, I just wanted to know how everybody else handles the stop loss and maybe get some ideas towards a strategy that would work best in my situation as compared to my current strategy i.e. no strategy

.

rahulg77 · #2 7th October 2006, 01:10 PM

Quote:

Originally Posted by agupta

How should one deal with stop losses? I know its a very relative question as everyone trades differently but my limitation is that I can't sit at the terminal the entire day and so cannot track the scrip minute by minute. If I put a trigger to sell the stock when it hits stop loss, most of the time, I find that the closing has been higher than the stop although to be fair, sometimes the scrip does take a fall which works out in my interest but that happens quite rarely, atleast to me. If I don't put a trigger and the stock falls, then I am stuck with the bugger until it reaches atleast my buy price and in doing so miss out on other opportunities. Talk about a Catch-22

. Anyway, I just wanted to know how everybody else handles the stop loss and maybe get some ideas towards a strategy that would work best in my situation as compared to my current strategy i.e. no strategy

.

Well if u think most of the times if u think that the stop is triggered and the script goes back after that then only take an exit when the close is below the stop loss. In this case u will also not need to sit in front of the computer all day long. But yes if the price keeps falling after the stop is hit u can loose on the profit u made but thats a decision if u have to make.

Rgds

Rahul

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