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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评论（12）

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  • EmilyMark
    ·2021-12-27
    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.
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  • MatthewWalter
    ·2021-12-27
    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.
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  • MyrnaNorth
    ·2021-12-27
    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.
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  • kgb
    ·2021-12-30
    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
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  • wh快乐投资
    ·2021-12-28
    这篇文章不错，转发给大家看
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  • dingdibg
    ·2021-12-29
    感谢分享
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