Question re Stop Loss Orders

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  #31  
Old 03-27-2022, 01:15 PM
Dilligas Dilligas is offline
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Originally Posted by 44Apple View Post
Do you tend to use stop loss orders?

I'm thinking of listing one for each of my etfs at the 10% loss point.

Seems like a holding could drop 10%, be automatically sold and then rebound the next day/week by a quick 8% or so and then I would be missing the rebound.

Thoughts?
With a stop loss and the market volitility each day, it could easily spike down 10% during the day and would then cause a sale of your stock. If you want a stop loss, have it set on the closing price to avoid the interday spikes.
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Old 03-28-2022, 06:14 AM
Mainegirl Mainegirl is offline
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Default The point of the Stop Loss order is to prevent loss greater than you can accept

A stop loss order does what it says. It stops loss of value below a certain point that you determine. It does not allow you to participate in a rebound, which is uncertain. There is always volatility in the market. The Stop Loss order is intended to protect your asset from a potential loss greater than you are willing to accept. You can always buy the asset again if you are interested in potential market gains. Good luck!


QUOTE=44Apple;2076599]Do you tend to use stop loss orders?

I'm thinking of listing one for each of my etfs at the 10% loss point.

Seems like a holding could drop 10%, be automatically sold and then rebound the next day/week by a quick 8% or so and then I would be missing the rebound.

Thoughts?[/QUOTE]
  #33  
Old 03-28-2022, 02:45 PM
valuemkt valuemkt is offline
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Actually, you have to be careful with Stop Loss Orders. Let's say you buy a stock for $20, and set a normal stop loss at 10% or $ 18. Your sell order is then placed into the system as a market order once it crosses 18.. If the next trade is $ 17, then that's what you get. Different brokerages have somewhat different terminology for Stop Quote and Stop Quote Limit orders.. read up on that.

Also, when you set up tight stops, at least in the days before electronic trading, and certainly in thin market stops, specialists trading in your stock often did what was termed "clearing out the stops". In the case I referenced above, they might have a stock that was fairly stable at 18.25, but see that there were numerous "stop" orders at 18, 17.75 (days before decimals), and lower the next trade to 17.5 or so trigger the stops and then reset the price back to 18.25.. That was so they could simplify their book. I actualy had that happen to a preferred issue I had a stop on not too long ago..
  #34  
Old 06-15-2022, 03:36 PM
DAVES DAVES is offline
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An ETF is an individual stock. Stop Loss orders are a good way to take a loss on a spike down and then miss the rebound. Better thing to do is to put together a well balanced portfolio and ride out the daily ups and down with an eye to long term performance. Unless you are a trader, you should just set your portfolio up and forget about it on a daily basis. If you are a trader, skip the stop loss and spend every day watching the market ticks.
I have a friend where we regularly discuss investments with. I did this and why kind of stuff. I regularly laugh at the thought we should set it up and let it ride the ups and downs. Warren Buffet labeled the greatest stock picker has stated he rarely beats the S&P 500. Warren Buffet has stated most of us should simply buy the index. Confession. I look every day, as does my friend. Over fifteen years, easy to access information, for a year I beat the S&P once or twice, So roughly 13x a simple average, which you/we can buy, beat me.

It does make me wonder who or what is moving what we call THE MARKET. I've never used a stop loss. Automatic, with me tends to get forgotten so I've lost control.
Wrong terms but I use a stop buy and a stop sell. I never buy or sell at market price.
When buying I place an offer to buy at $. The same with selling. In my IRA where short term tax is not an issue. You/we will pay short term tax on it even if held long term-RMDs. If, I get the stock at MY offered price, I often put in a good till cancelled sell order
  #35  
Old 06-15-2022, 03:54 PM
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Originally Posted by valuemkt View Post
Actually, you have to be careful with Stop Loss Orders. Let's say you buy a stock for $20, and set a normal stop loss at 10% or $ 18. Your sell order is then placed into the system as a market order once it crosses 18.. If the next trade is $ 17, then that's what you get. Different brokerages have somewhat different terminology for Stop Quote and Stop Quote Limit orders.. read up on that.

Also, when you set up tight stops, at least in the days before electronic trading, and certainly in thin market stops, specialists trading in your stock often did what was termed "clearing out the stops". In the case I referenced above, they might have a stock that was fairly stable at 18.25, but see that there were numerous "stop" orders at 18, 17.75 (days before decimals), and lower the next trade to 17.5 or so trigger the stops and then reset the price back to 18.25.. That was so they could simplify their book. I actualy had that happen to a preferred issue I had a stop on not too long ago..
The more I see, the more I realize HUH that can't be so. I have an account with Fidelity.
Commissions are now zero. As much as they LOVE me they cannot work for FREE.
I've had price improvement. You put in a bid of say 29.95 and it is filled at 29.945 of course not objection to paying less and I don't care but how is it decided that the seller should not get a price improvement to my bid of 29.95. For that matter I can only bid two decimal places. I've had orders filled at four decimal places.

The big guys, people like Buffet do not even play in the same market as we small guys, we who are bait for the sharks, do. You can watch trades, placed filled etc. Trades of 30,000 shares of xxx that Buffet buys you do not see. He likely calls places like Fidelity and says I will trade you xxxx shares of for xxxx shares of.
  #36  
Old 06-15-2022, 04:05 PM
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Warren Buffet labeled the greatest stock picker has stated he rarely beats the S&P 500. Warren Buffet has stated most of us should simply buy the index.
From 1965 through the end of 2021, Berkshire shares generated a compound annual return of 20.1% against 10.5% for the S&P 500.
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Old 06-15-2022, 05:24 PM
coralway coralway is offline
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never use them. Keep track of investments all day, every day. Missed too many breakouts with them. But, if you are not comfortable keeping an eye on things all day, they are a useful tool.

Many folks would rather not keep track all day, every day - they have full time jobs, or may not understand how to read charts, or not care about support and resistance.
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Old 06-15-2022, 06:03 PM
Stu from NYC Stu from NYC is offline
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From 1965 through the end of 2021, Berkshire shares generated a compound annual return of 20.1% against 10.5% for the S&P 500.
An incredible track record.
  #39  
Old 06-16-2022, 10:03 AM
valuemkt valuemkt is offline
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The site i use has StopQuote and StopQuote Limit orders. A StopQuote is triggered when the last sale price hits your number and immediately turns the sale into a market order. In the case of a rapidly declining market your sale could be substantially lower than your StopQuote price. A StopQuote Limit order is also triggered when the last sale price hits your number. However, your order is converted into a limit order, meaning the sale is NOT executed until you get your limit price or better. In the case of a rapidly declining market if your limit price is not hit, you continue to own the stock albeit at a presumably much lower price. In either case, remember enter GTC (Good til Cancelled) in the timeframe slot, else the default is only good for the day. Most GTC's are good for six months.
  #40  
Old 07-07-2022, 03:09 PM
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Originally Posted by 44Apple View Post
Do you tend to use stop loss orders?

I'm thinking of listing one for each of my etfs at the 10% loss point.

Seems like a holding could drop 10%, be automatically sold and then rebound the next day/week by a quick 8% or so and then I would be missing the rebound.

Thoughts?
Our current stock market and rate of inflation has made most feel uncomfortable.
I've never used a stop loss order. As I understand it, you can put in a stop loss order and if it drops to your less 10% it will be offered for sale. That does not mean you will get the less 10%. Your shares may actually be sold at lower than the less 10%.

Our stock market. I use the S&P as average. My brokerage account shows rate of return. Money? I question if it is REAL. If it is real, it cannot simply disappear.

My easy to see records go back 15 years. This is the first year that I have lost money in the market. On top of that there is INFLATION. Now approaching 10%.

Depending on whether you hold the etfs in an IRA where you are TAXED at your highest tax rate, no long term tax benefit, when you need to or are forced to withdraw the money at a certain age. Or in a taxable account, you can actually end up paying tax and have a loss.
  #41  
Old 07-07-2022, 07:30 PM
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Quote:
Originally Posted by 44Apple View Post
Do you tend to use stop loss orders?

I'm thinking of listing one for each of my etfs at the 10% loss point.

Seems like a holding could drop 10%, be automatically sold and then rebound the next day/week by a quick 8% or so and then I would be missing the rebound.

Thoughts?
If you are in for the the long term I would not do this for all. Maybe one or two but then I would tend to put a sell at a price that is higher than the current market and maybe move it up as the market goes up. In short I want to get out of the investment. I could see a stop loss on these.

My problem with the stop loss is you will not know when to get back in the market. Also remember you stop loss stock can sell below the price you specified.
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