Elite Pharmaceuticals Inc (ELTP)

[newguy11]

If you have a stop loss on your shares take it off, In reality, in a fast market when the stock gaps down (during flash crashes, breaking news, or fake tweets), your stop loss is triggered. The bad news is that it will be triggered at the next available market price, which could be many points lower.

In other words, your stock could be automatically sold at the lowest price, and instead of locking in a 5% loss, you could lose much more.

Another problem with a stop loss order is that when you enter it into the computer, the order is transparent. A game that some market-makers played (these days, it will be computer algorithms) is “run the stops,” when the stock is forced low enough to trigger a large cluster of stop loss orders (usually at round numbers or well-known support and resistance levels). After the stock is sold at a popular stop loss price, the stock reverses direction and rallies.

The biggest problem with stop losses is that you have given up control of your sell order to the computer. During volatile markets, that can cost you money.