Sell Stocks Stop
trailing-stop question when buying stocks?
I have a question about this method please….
The price I have to pay is 55.13
The “distance to market” is 0.55
The trailing step is 0.05
Thats just an example….
My questions:
1.Does that mean that the stock will automatically sell at -1% (-0.55) if the stock happens to go down?
2.And that the stop will creep up by 0.05 cents at a time?
Do I have that correct?
That’s what I want…I want to have a trailing stop at -1% for the stocks I want to buy
In my example is that the case….will it sell by itelf whenever it goes down by 1%?
Thank you so much
Oh i forgot….
One more thing:
Is a order to buy with a trailing stop a market order or a limit order?
First, your stop will be $0.55 away from the market, not 1%. If the stock goes to $2000 the stop will still be $0.55 away, not 1%.
Just because you have a stop doesn’t mean your stock will “automatically” be sold. A stop simply means that a market order will be entered to sell. You might get filled but if something strange happens the market can gap lower and there’s no telling where you’ll be filled.
The stop will indeed go up in $0.05 increments.
You can manually adjust the stop price if you want to have a 1% stop but I don’t know of anyone who does it automatically. Given that the stock will have to appreciate quite a bit for the distance to market to be much different than 1% you might just decide to manually change once a week.
One more thing, given the volatility of the relevant stock, a 1% stop may not be very far away. I think you’re going to get stopped out a lot.
Also, your initial order to buy can be any type of order you want. It’s distinct from your trailing stop.
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