cintrix, after doing research, I want to be sure I correctly understand the stop loss method.
For example, (XYZ) is up 30% or $9 since I have bought this stock. The price of this stock is at $30 per share. Despite (XYZ) still showing a strong positive trend, I want to lock in any current gains. Though I would still like to "milk the cow" so to speak. In this case I choose the stop loss method.
I choose a stop loss based on %. I choose to make the stop loss 3% at $30. If (XYZ) dips below 3% or $28.20 the stock will be sold.
(XYZ) trends upward: The stock raises 6% since placing the order to $31.80. At this point, the stock will be sold at $30.90 if it moves under this point. Essentially, the 3% buffer if you will has rose and will lock in a 3% gain for a total of 33% gain.
This time I choose a stop loss based on $. I choose to make the stop loss $1. If (XYZ) dips below $1, the stock will be sold at $29.
(XYZ) trends upward: The stock raises $1 since placing the order to $31. At this point, the stock will be sold at $30 if it moves under this point. Essentially, the $1 buffer if you will has rose and will lock in a $1 gain for a total of $10 gain.
Do I understand correctly?
Thanks, Gulley
