Looking for a percentage that has worked well for you in the past, or maybe a particular amount if that's how you roll, and what made you decide on it at the time.

Conversely, if you have had a decision flop, any info on what to avoid is also appreciated.

Thanks

More information needed please. Is this an investment account, speculation??

It can vary depending on many factors. Basic day trading rule of thumb is, using technical analysis, if the price breaks down below a trend line or below the support line, get out. Be advised though, the Market Makers can see your hard coded stop loss price and they take delight in bringing it down to just that level to wash you out just before they let it run.

You may also want to set your stop based on "what is the max amount of money I can live with losing on this one?"

Yup, market makers eat stop losses for lunch.

They’ll dip that biotch to “clear the boards” if they need the shares.

Can you instead set an account alert? Then you can check/watch it more closely if the alert hits at, let’s say, a 10% dip?

More info:
Single ticker symbol that was purchased over a year ago when covid had EVERYTHING down. Now it has more than doubled, and though I have good reason to believe it will go another 30% or so in a few months, I'd like to set a stop loss somewhere prior to that.

Never having done it before makes me wary of mistakes.

The stock alert is a good idea. As far as market makers eating my stop loss I don't think they'd notice my drop in the ocean...but maybe I am underestimating?

stops are a great way to lose your shares. You'll get scooped. If you want a textbook example look at the intraday on CMRX on Wednesday.

The problem is that we as normal people don't actually see the true market swings. For example years back I set up a % stop loss on AMD. I looked at available data stating largest day loss for the last 10 yrs. Which biggest single drop was 13% so being cautions I set it at 18%. Which 4 days it triggered but the data I had access to never showed an 18% move. A buddy that works in finance explained we don't see the micro second market moves as normal.

quote:

Single ticker symbol that was purchased over a year ago when covid had EVERYTHING down. Now it has more than doubled, and though I have good reason to believe it will go another 30% or so in a few months, I'd like to set a stop loss somewhere prior to that.

^^^^^^^^^^^^^^
The biggest mistake novice investors make is to sell their winners and hold on to the losers hoping they will come back. I would not sell and instead look at the dogs in your portfolio and trim them. Stop losses are not good ideas. Besides locking in a gain means taxes unless the stock is in a tax free account.

Thanks for the replies, I'm forgetting about stop losses now.

Much obliged

So what stock are you looking at?

If you don't sell your gains, you don't really have any gains, it's as simple as that.

The price of any and all stocks go up and go down, often for no apparent rational reason. If you don't sell when the price has gone up, you don't have a gain. I have often congratulated myself on a position that did really well, only to have it fall dramatically a few months later, for no apparent rational reason. See Facebook, Google, Moderna and many others.

If I have a position that has doubled, and the direction of the market is uncertain, I will sell half of the position. I recover my cost and my remaining investment is playing with the house's money.

I never have used a stop loss order. I have bought put options very rarely.

I almost always use limit orders to buy or sell. And I don't mind paying capital gains tax, but I hate to watch a capital gain disappear because I waited to execute a trade.

We are just entering earnings season, and some things will get very silly. Are you ready?

I view a stop-loss as capitulation to disaster. It is time to scrape what I can before it goes to zero. Stop-loss is not a trading tool, usually.

Back in the tech-wreck I had some stocks drop 90% overnight, crashing through the stop-loss and then selling for pennies. That is the risk of the stop-loss, that it will sell for a lot less than the stop-loss price. If it is a big whip-saw where the price jumps back up, you just lost a lot of money unnecessarily.

If an equity is rising without large swings, one potential good use of the stop loss is to set a trailing stop-loss. As the price rises, inch the stop-loss up under it. But you always have to be prepared for the equity to sell if it does take that drop.

One of the worst feelings is seeing gains evaporate as the stock price slides down. A stop-loss might be a valuable tool to keep hope out of the equation, forcing a sale before you lose money.

Just as good a question is do you have a target in mind to sell? And to confirm what Hay2bale was saying, you can sell half now for a guaranteed profit.

I have never set a stop loss in stocks. I made hundreds of crypto trades in 2000, learned a bunch and learned I don't know it all. If you trade crypto with leverage you pretty much have to have a stop loss, and they get run frequently. The biggest lesson I learned in that year was once in profit to move the stop loss to break even and to take profits on the way up. You don't have to sell the whole position at once, but can take profit along the way.

I'm not suggesting anything here'd but I'll offer a thought:

How you think about your investment is an important part of your investment strategy. If you have the instincts of a river-boat gambler and your in it for the game then the losses or gains don't matter, movement is what matters. Or if you are closer to normal you might want to consider where your 'ouch point' is. If losing 20% of the current price is going to send you to the fainting couch you might think about a stop at that price and then trail it as the stock moves.

If you don't want to lose the stock for whatever reason, don't stop it but then with any move you might rethink.

The day traders I know stop everything and get out of the market at end of day every day. They report that they stop very close to market.

So this two very rough approaches are in the same market you are in, sort of, and think about it very differently.

So, think about what you want vs what you can bear and then do something that will give you a good chance to get there.

One more note on stops. If you are long and some negative news comes out after the close or pre-opening, your stock may open far below your stop loss number. You'll get filled (sold) at that opening price. That is called a gap-down open. Very often that can be the low of the day. Market makers execute all the stops as far down as they can, while filling buys by savvy institutions who know the stock will likely trade up into the gap. I look for these big gap down opens to initiate trading positions. Same goes for huge gap-up opens. Often they are a great chance to sell a trading position, or at least a piece of it. You have to watch these situations carefully. If it is a major drop, sometimes it takes 2-3 days to flush out, as margined players are liquidated.. I look for those patterns for entries.

quote:

Originally posted by Fly-Sig:

If an equity is rising without large swings, one potential good use of the stop loss is to set a trailing stop-loss. As the price rises, inch the stop-loss up under it. But you always have to be prepared for the equity to sell if it does take that drop.

Doh! Trailing stop loss is what I meant all along I do believe. But no matter, the whole thing has been beaten out of me at this point. Likely for the best.

quote:

Originally posted by apprentice:


Doh! Trailing stop loss is what I meant all along I do believe. But no matter, the whole thing has been beaten out of me at this point. Likely for the best.

Don't worry, you'll heal, and think of all the fun you had.