I have been reading up on order brackets that allows someone to set a profit exit, stop loss or a trailing stop order. Besides limiting potential profits with a profit exit why wouldn't someone use order brackets? Especially a trailing stop that allows you to pull both a profit and limit losses if the stock turns down after going up?
Thanks,
Robert
There's a couple reasons that you wouldn't use them, although they can certainly be beneficial. You wouldn't want to use them on OTC or similar highly volatile stocks. Also, they can be thrown in extended hours or premarket sometimes, or can fail if you don't include those times in your order. And sometimes whenever a stock really sells off, they don't trigger, or trigger significantly lower than you had set it at.
Big board yes, nas stocks and otc no. Mental stops need to be used when trading volatile stocks
Yes and stick to those mental stops as well, don't change themOriginally Posted by haftafish22
Exactly why I quit Robinhood and went with a brokerage who had those stop limit orders and limit orders. Correct about the micro and small cap OTC stuff being too volatile. Especially nice if you are traveling or working full time and cannot watch the market all the time.
I use trailing stop loss on all my individual stock purchases, but not on my ETF. They are big board not OTC, but many times I can tell you that it may cut you gains as well as your losses.
I had 1000 shares of Moderna that I purchased back sub 20., and I set a trail of 1.61, which at that time was about a 2 day swing. It sold on me at around 42, but if you look at Moderna, you will notice that it ran up to 189. On the other hand, it helped me out with Pfizer, since it sold at 41 when it went down, but never bounced back up.
Yea, I made money, but only little money, so set your loss stop with plenty of cushing. BTW, that was not the only stock that it has happened to me.
I use Fidelity as my broker, but I do have some issues with their funds policies.
The Schwab app trailing stop allows me to select either a % or points. Is points the same as dollar value? So would a 1.5 point trailing stop = a $1.50 trailing stop?
Speaking of fidelity. Do not play day of option contracts. I had (had) a Roth set up with fun money and they executed options trades on my behalf costing me a shit ton of money. Fidelity imo is for long term investing and not trading.
You hit that nail right on the head. I play with stocks for fun, but I have everything else into Funds or ETF
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