I'm curious how others handle stop losses. Do you have a set % that you won't go past? Does it depend upon the particular stock? I usually work off of a % basis, but it's perhaps not as hard and fast a rule as it should be. I have a few dogs that I should have dumped, but I'll swear historically almost every stock turns around immediately after I sell it.

 

Stock by stock... It might tank below your basis, but what if you are "convinced" it will rise again?
Only keep a stock if you can also say you'd buy it at this price.
If a stock goes down but I have no reason to believe it will rebound, I dump it.

*but dont listen to me, I haven't been in the market long enough.

 

You've only been in the market for 8 weeks

I follow Cramer's model of stock ranking which I've described before. I don't use stop orders because that's not how I roll. If I believe in the fundamentals of what I've got I stick with it until they change. I'm sure there is a case for pre-programmed trading based on technical factors but I don't have enough money to take advantage of statistical analysis.

If I'm losing money on a stock I do more research on it to make sure I haven't missed something. NYX for example, right now I'm losing my shirt but I stand by my conviction that it's underestimated by the market. I'd continue to buy it here if It wasn't already the biggest single position I hold and if I wasn't fully invested in other things. Had I put a stop order on it for say 5% below basis the stock would have sold, I'd have paid commissions and I'd have to go buy it all back again paying even more commissions. RIMM same deal. I bought it at $134 a few weeks ago and had it drop to $131 soon after. Had I set some predetermined stop I wouldn't be up 7.5% on it right now.

Wyatt, if a little green, is right in principle (IMHO). If you believe in the stock and want to buy it where it is then keep it or buy more. If the loss concerns you then do more research and decide if you really want to be on-board or not. I think sell-stops will cost you far more than they will save you.

 

No idea where the 8 wk reference comes from but granted I'm a newb compared to most of you. I only started actively trading my own account about 7 months ago and prior to that was just listening to broker's ideas and pretty much going with them (didn't work out so well in the long run which is why I'm doing it myself now).

My experience with stop losses has been more in my professional life trading petroleum products. Stop losses are part of the program period in my company. I suppose I've tried to use some of that experience in the stock market and it may or may not be relevant.

 

Directed to Wyatt

 

More than 8 weeks, and followed it for even longer than I've been in.. But does that mean I haven't bought and sold since then? Just told her how I've worked, which seems to do the trick for the most part.

 

What does this mean?