Common Investor and Trader Blunders

jayc
2021-12-27

Not Using Stop-Loss Orders

A big sign that you don't have a trading plan is not using stop-loss orders. Stop orders come in several varieties and can limit losses due to adverse movement in a stock or the market as a whole.1 These orders will execute automatically once perimeters you set are met.

Tight stop losses generally mean that losses are capped before they become sizeable. However, there is a risk that a stop order on long positions may be implemented at levels below those specified should the security suddenly gap lower—as happened to many investors during the Flash Crash. Even with that thought in mind, the benefits of stop orders far outweigh the risk of stopping out at an unplanned price.

A corollary to this common trading mistake is when a trader cancels a stop order on a losing trade just before it can be triggered because they believe that the price trend will reverse.

$Tesla Motors(TSLA)$$S&P 500(.SPX)$$NASDAQ(.IXIC)$$DJIA(.DJI)$

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精彩评论

  • EmilyMark
    2021-12-27
    EmilyMark
    Perhaps only a veteran can accurately judge the threshold of a stock fall and sell it at the right time to minimize losses. But most people do not have the ability to do so, so it is necessary to set up a stop loss order.
  • MatthewWalter
    2021-12-27
    MatthewWalter
    Of course, automatic execution programs are not human, and misjudgments are inevitable in this process. after all, they are not as good as human beings and can only execute orders in accordance with the program.
  • MyrnaNorth
    2021-12-27
    MyrnaNorth
    There are always risks in stock investment, and for investors with specific bearing capacity, the establishment of stop-loss orders is a good measure to prevent losses.
  • kgb
    2021-12-30
    kgb
    市场总是有风险的，设好止损就是保护自己本金不受很大的损失否则盈亏比会让我们总账不赚钱甚至大亏钱
  • wh快乐投资
    2021-12-28
    wh快乐投资
    这篇文章不错，转发给大家看
  • dingdibg
    2021-12-29
    dingdibg
    感谢分享
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