Stop Loss Markets

Hello you very intelligent and pleasant people. I do hope your day is going well so far.

I kindly wanted to ask after your research on a particular stock if you found this was a good fit for your investment criteria, could you set a stop loss say for under 5% of your buying price. I know this is probably thinking more in the short term as stocks sometimes are volatile. However would this be an okay strategy to employ if you was very risk averse and wanted to limit your losses as much as possible please? If anyone could kindly get back to me i would be enormously thankful and grateful.

Hope you enjoy the rest of your day and sending you lots of good wishes. All the very best and thank you for any support you can give.

There may be lots of very different opinions on that one.

My personal take is this: if I add a stock to my portfolio, I very much like this company.
If I get to buy it for cheaper, why would I like it less?

Different people will have different views on stop losses. The market can easily shake out a stock (especially less liquid stock) and drop the price before a big rise. You can look at charts for even big companies and see brief large spikes that could have triggered all sorts of orders.

@Zergui I’ve frequently seen stop losses called “take loss” to emphasise that you are crystallising a loss rather than relying on the fundamentals/research… The big problem with stop losses of all types is that if you set them too close a small bit of volatility or pull back could trigger them but if you put a wide gap the market can still create a spike that triggers them but you are saying that you are happy to give away a big chunk of the price. I share your view of standard stop losses but I do like the idea of trailing stop losses but in reality you would have to set them with a decent margin to stop them being triggered by volatility as a price rises or small pull-backs that recharge the uptrend (and T212 doesn’t support trailing stop losses anyway)