Quote:
Originally Posted by Airelon
Honestly mate, in 12 years, I have yet to meet one, just one professional trader who does not use stop / loss orders on swing trading.
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Pro traders, I imagine fall in case
"2/ You are in a lot of positions (like 100 or more), beside options etc and you need automated safeguards..."
But if you have 10 or 20 and throw a glance at the markt everyday, do you need a stop loss?
Maybe on risky stocks or risk-of-bad-news stocks, I don't know. But it should always be a case-by-case decision, not a principle.
Personaly, when I'm in the boat, I ride the waves.
I often buy stock I KNOW could go lower in the net days.
When I buy stocks I always plan to buy more if it falls very low, instead of a stop loss because I believe the price I bought at will be seen again when the stock recover.
Sure, i could sell on a stop loss and buy lower, the risk is that the stop loss is set at the bottom from which it rebounds because I tend to set stop loss at resistance levels.
The few times I used them, I set them exactely where they rebounded, triggered a penny shy of the intraday bottom, with no chance of buying lower and selling at the worse level of the week range. But maybe I didn't use them properly.
Maybe I should n't hesitate to buy back when a stop loss was triggered by mistake. I will lose money buying higher than at what I sold, but not as high as when I bought the first time, so the loss are limited. Only commissions may be high if this experience is repeated often.
A stop loss make sens when you can buy back lower, IMO.
For that one should have a well designed strategy and swift reactions.