How to Set a Stop Loss

[Leth]

How to Set a Stop Loss
by Unknown Author

1. First of all let me explain what a stop is for those who don’t know. A stop is an order that will automatically get you out at a certain price. It is designed to limit loss. For instance if your stock is at $50 and you place a stop at $48 your stock could go down to $20 for all we care you sold at $48. Your stop will not activate unless your stock hits $48 or lower. Also remember that stops are only good for 1 day.
2. To place a stop, first go to your brokerage account. Go to the section were you can place a trade. Instead of choosing a market order, choose a stop limit order. After choosing a stop limit order either type or scroll down to the number where you would like to place a stop at.
3. After that you have set your stop you will be able to forget about it. If your stock drops to your stop or lower you will sell it at your stop. If your stock goes up or does nothing your stop expires worthless. You must reset your stop every day.
4. If you place a stop limit order in the middle of trading hours it will be canceled when trading hours stop if not already activated.