Stop Loss Strategies

[netwrangler]

Here are two stop loss strategies that I might follow:

• Sell now, this stock is tanking!
• Sell now, you will be able to buy this stock back at a lower price.

I don't think the stop loss levels are the same for these two scenarios.
I'm sure there are other scenarios.

I suspect that stop loss strategy is related to the time you think you will hold a stock. Certainly, there are other factors.

Can you help me on this subject?

[aiki14]

Originally Posted by netwrangler

Here are two stop loss strategies that I might follow:

• Sell now, this stock is tanking!
• Sell now, you will be able to buy this stock back at a lower price.

I don't think the stop loss levels are the same for these two scenarios.
I'm sure there are other scenarios.

I suspect that stop loss strategy is related to the time you think you will hold a stock. Certainly, there are other factors.

Can you help me on this subject?

My plan says I will not tolerate a loss greater than X, when price reaches X I sell. Then I remove it from my screen, take it as a tax loss and don't look at it for 30 days so I don't get in a wash sale situation.
I determine X when I buy in and modify it upwards to follow the stock, but nearly never downwards. And I re-evaluate the position very frequently.
X is usually between 5 and 10% down depending on the Beta of the stock.

[netwrangler]

Thanks. That helps a bunch.