rocky9281 asked:
How does such a stop loss work? Will the shares be sold automatically from my account once it reaches that price?
How does such a stop loss work? Will the shares be sold automatically from my account once it reaches that price?
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Doc had it right.
The problem however is that it automatically sells it. Though this may sound counter intuitive, anyone who uses stop losses, or has been trading in the market, has seen stocks gap down (usually on news) and then reboundback up do to an over reaction.
This makes stock loss orders tricky to use, especially in a volatile market; as price swings can be extreme day to day or week to week. Im sure you have been noticing the market make several 100+ point swings to the up and down side.
I think there are far better strategies than using stop losses. If you learn how to use Options, there are several methods.
Christian Nago
CEO & Chief Investment Officer