Hi Guys, a Newbie here, I have noted how important stop losses are deemed to be for daily trading, but I am working on some longish term stuff initially until I get the feel of things. So if I were to place an order for 50x Bobs Biscuits at $25 with hope that over many months they make $50, should I just set a sell @ at $50+ or a stop loss at $48 when in a down direction?
Strictly speaking, the terms “Stop Loss” and “Take Profit” apply only to CFD trading.
Anyway, if I understand correctly, you are asking if you should place a sell order at $50+ now, or wait until the shares go above $50 then place a sell order at $48 to protect you earnings.
That will depend on many factors if the stock reaches that price:
- Will you want to cash in or you will want to wait for more growth
- How will the stock be performing at that time, i.e. still going up or started to go down.
In any case, 100% growth is massive, may take very long to achieve, and you will have plenty of time to decide.
Thank you for that response, I have no current intention to get involved with CFD’s until way down the line. The query was purely relating to regular stocks, as you say there is plenty time to consider the positions.