Jump to content
Monk

Setting Stop Loss Orders on Current Positions - "efficiently"

Recommended Posts

Does someone have advice on "How to efficiently set Stop Loss Orders?" Here's what I mean by "efficient." If I put on a large position, I have no problem knowing to enter a Stop Order immediately. But when I'm scaling into a position, I haven't decided the best way to put on a Stop. Do I wait until my position is built? Thereby, trading w/o a net. OR do I put on a Stop and update it at each position? Thank you.

Share this post


Link to post
Share on other sites

You should always have a mental stop of a price at which to get out if your strategy has broken down. That should stay the same regardless of your share sizing, which just means your risk in total dollars could grow as the trade goes on. An automated stop isn't always best since you sometimes see stocks that dump for a few seconds as algorithms sweep out peoples' stop losses, so you just have to weigh that with the reality that every once in a while, a stock might crater instantly and cost you more than you expected. Assuming that you're consistently profitable, those rare cases end up averaging out and being more psychologically painful than anything.

Share this post


Link to post
Share on other sites

Dima makes a good point. I am not a fan of automatic stops as it can get you stopped out of a good trade that might still be in play depending on the price action. Also putting a stop and updating at each position works if the stock is not moving very fast, I'm thinking it might be difficult to do that extremely quick.

 

Don't think of it as trading without a net if you have a mental stop, you just need to be able to react quickly and not hesitate. If your mental stop loss, execute and get out. This is something that I have struggled with when first going live but as time goes by I am getting a lot better and more disciplined.

 

I know some people do not like Hotkeys as it can cause costly mistakes if the wrong Hotkeys is pressed, but you can really get out of a trade very quick using them.

Share this post


Link to post
Share on other sites

I have a similar question - is it possible to put a stop loss price at the time of a BUY.

For example, if STOCK_A is $10, and I'd like to buy 1000 shares of it with a Stop Loss at $9.80, how can I put that order in at once?

I'm using DAS

Appreciate your help!

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×

Important Information

By using this site, you agree to our Terms of Use, Privacy Policy and use of We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue..