Quotes About Stop-loss

Basically, what I do is place a stop, generally 10 to 20 percent below the current price, whenever I buy a stock. The exact level depends on my own analysis of a stock's trading pattern. If a stock violates this stop, I'm out.

Almost all commentary on the development of a plan will list the ingredients as entry, stop-loss, and price objective. However, to be effective as a loss-control tool, the plan must be derived by deciding STOP, ENTRY, then PRICE OBJECTIVE. Failure to choose a price objective could cost the trader some potential profits. A poor entry price could increase losses or reduce profits. But not having a predetermined stop-loss can, and ultimately will, cost you a lot of money.

The initial buy-stop should have been placed right above the prior rally high

For example, assume you're considering a setup where the stop-loss exit is $3.54, and the current price is $3.62. Taking the $140 maximum allowed loss we calculated above, divide that by $0.08 ($3.62 - $3.54 = $0.08), and you get 1,750 as your maximum position size (140/.08 = 1750). I've provided an Excel spreadsheet that will quickly

I think investors ought to focus on making sure that the stock is within their circle of competence, that it's worth a lot more than it's valued at - and once you have those two things, a stop-loss makes no sense.

Place your stops at a point that, if reached, will reasonably indicate that the trade is wrong, not at a point determined primarily by the maximum dollar amount you are willing to lose per contract.

Place your stops at a point that, if reached, will reasonably indicate that the trade is wrong, not at a point determined primarily by the maximum dollar amount you are willing to lose per contract. If the meaningful stop point implies an uncomfortably large loss per contract, trade a smaller number of contracts.