What is the stop?

stop stop is a special type of order for sale or purchase of shares when the price of this share reaches a predetermined stop price. Investors are used to limit the loss that the investor could encounter or try to lock the profits from shares. Investors can give their broker an order to stop to automatically sell the shares if the stock price drops to a specific price called an order for sale. In the order of the Purchase stop, the investor buys shares as soon as he hits the specified price and hopes to continue to grow.

As an example, consider an investor who owns 100 ABC shares and purchased them for $ 10 (USD). The price is now for $ 12 per share. The investor can provide a broker for sale if the ABC shares drops to $ 11. In this way, the investor is ensured by a $ 1 profit per share and does not have to constantly monitor the market to ensure that the price reduction will cause the profit to be lost.

If a short time later, the investor notes thatThe price is now raised to $ 13, the investor could cancel the first stop order and place the second stop for stopping the price of $ 12 to ensure that a profit of $ 2 per share is achieved. As the shares move in the price, the stop order can be constantly changed until the price eventually decreases and the stop is not carried out and the shares are sold.

Stop orders can also be used to reduce loss if the stock prices have dropped after purchase. In the previous example, if the investor buys ABC shares for $ 10 per share, the order could be banned with a $ 9 price in an effort to reduce the loss to only $ 1 per share.

ORDER STOP WASTER is still purchased in stock. The idea with this type of order is to buy shares that begins ascending trend. As soon as the stock increases to the price set, it is purchased. In this way, the investor can try to buy shares, as well as its price is starting to rise, with the hope that the price will continue to rise.

ORDERS STOP BESTThey are always carried out at a stop price. If the stock falls very much by a large amount at the same time, the order stop can be launched and the supply is sold. However, as stocks are always sold at a market price, the price may be under the track. ORDERS STOPS are entered into the computer trading system and are automatically carried out whenever the price per track is or below.

If there are many stops that are triggered by a specific stop, the stock price can fail very quickly. Fortunately, it is quite rare. Stop orders are very often used by active investors because they allow fast and automatic responses to stock prices. Investors of shopping and holding are unlikely to use this type of investment strategy.

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