Stop the blood loss, don’t bleed out like you did today. -Trailing Stop Losses, for new traders

Stop the blood loss, don’t bleed out like you did today – Trailing Stop Losses

Did you lose money today after you were up big time yesterday?

Were you in profit? We’re you up 25% or more on your money?

Next time set up a Trailing Stop % or $.

Keep in mind that the stock market averages 7% gains per year. PER YEAR. In penny stocks you can make or lose so much more than that in just a few hours. Earlier today I posted about MLFB. It went from .0016 to .099 in 4 hours. That’s one hell of a gain. Your $100 into $600 for 5 minutes worth of work. You are welcome.

Okay, so you won’t be able to hit the very top right on the money, damn near ever. You have a better chance of beating Bloodborne on the first try. This is where your stop loss and trailing stop losses come in.

Stop loss is when you set up a point at which your stock will sell automatically when it drops to that point. You can use this for slower moving stocks and just keep increasing the price manually as the stock increases in value. It keeps you from losing it all like you may have today.

For penny stocks, I prefer a trailing stop. This is when your sell order increases in value automatically as the stock rises. If you buy in at $1 then it goes up to $1.50 you set up a trailing stop for say 10 cents. This means you will not make less than 40% on your investment.

If the price goes down to $1.40 the trailing stop will trigger and you will have made that 40%. If the stock goes to $2 then the stop loss will increase to $1.90 and your profits are locked in and if the stock starts to drop it will trigger at $1.90. Making you a cool 90 cents per $1 invested.

Note: You can also use % instead of $ for your trailing stop loss. This would allow you to say okay I want to make sure my stop loss keeps me from dropping more than 10% from the highs of the day.

Risks: Of course everything has a risk. The risk to this is creating your stop loss to tight and getting stopped out on daily fluctuations in the market. From the previous example you buy in at $1 and it goes to $2 then it drops to $1.89 triggering your stop at $1.90. Then it immediately shoots up to $2.50 and you are pissed you missed those gains. Yep, you missed those gains – lesson learned. Don’t make your stop loss or trailing stop loss too close to the actual value of the underlying stock.

If you want a more technical explanation go here:

Source :

Laisser un commentaire

Votre adresse de messagerie ne sera pas publiée. Les champs obligatoires sont indiqués avec *