Note that at this point your stop loss order is going to be close to your entry price. It controls your risk by limiting your loss to that price. A trailing stop-loss is sometime referred to simply as a trailing stop. That is, the stop-loss order will always be based off of the stock’s highest price, which is usually calculated based on closing-day prices rather than intra-day prices. For example, let's say you just purchased Microsoft (Nasdaq:MSFT) at $20 per share. A trailing stop-loss order is a special type of trade order where the stop-loss price is not set at a single, absolute dollar amount, but instead is set at a certain percentage or a certain dollar amount below the market price. In Elliott Wave Theory terms, Stop Loss should be placed at a level breach of which would invalidate the current Wave Count on the basis of which you entered the trade. For example, if a long trade is entered at 1,250, a 2% stop loss would be placed at 1,225 (25 points lower than the entry price). Approaches (different strategies) to Placing Stop Orders, their pros and cons. Therefore, stop-loss traders want to give the market room to breathe, and to also keep the stop-loss close enough to be able to exit the trade as soon as it is possible, if the market goes against them. Stop Loss should be placed at the nearest level which is not easily likely to be breached. Percentage based stop loss orders are stops that are placed a fixed percentage behind the entry price. The trader sets a stop loss on each trade at a price level they wish to exit a losing trade at. Support method is based on technical indicators and also based on the current trend as the investor identifies a support level and places a stop-loss order at that price. Unlike standard stop orders, with a stop-limit order, you must enter both a stop price and a limit price. Then you would set a stop-loss order at (100*10%) = 10=100 – 10 = 90 #2 – Support Method. So, if the price reaches or dips beneath $75, then this would trigger an automatic market sell order for the stocks that the investor owned. For a buyer, the stop-loss order is a sell order. You stop loss order will go under the previous days low (red line) because it is lower. Trailing stop loss order: day 3. Find out how you can use it to help you implement your stock-investment strategy. A stop-loss is designed to limit an investor's loss on a security position. For example, while entering at the beginning of a new trend at end of Wav... (more) Loading… If you buy a stock at $20 and place a stop-loss at $19.50, when the price reaches $19.50 your stop loss order will execute, preventing further loss. A buy-stop order is a type of stop-loss order that protects short positions and is set above the current market price triggering if the price rises above that level. How to determine where to put yuor stop loss order. If you buy a stock at $20 and place a stop-loss order at $19.50, your stop-loss order will execute when the price reaches $19.50, thereby preventing further loss. So, if the price reaches or dips beneath $75, then this would trigger an automatic market sell order for the stocks that the investor owned.

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