Traders should study the market’s resistances, its supports, intraday, daily, turning points, whole numbers in the area to which they could turn as well as many other criteria. This will be the only way to minimize the chance that any stop-loss order will be triggered while also limiting the amount of a loss. This will be a point/course at which they will have the least chance of seeing their “stop” hit, but also a point at which, when their “stop” is triggered, their loss will remain minimal and quite “reasonable”.
There are details to help people learn how to optimize the use of market, limit and stop orders and it is vital that people use them effectively.
Choosing the right stop order
If a person trades at the rise of a stock, as soon as the purchase is confirmed by the broker, the person should immediately enter a “sell stop market” order at a specific point below their purchase price. This will protect their position in case this action turns against them. Readers can view more here.
If trading “short”, as soon as the “short sell” is confirmed by the broker, immediately enter a “buy stop market” order at a specific point above the entry price (this is the selling price of the “short” position just opened) to protect this position in case the stock turns.
It is also crucial to note that people should ask their broker if the stop orders are saved on their computers or not. If this is not the case, it means that if the client’s computer crashes, for example, just after they have entered their stop command or if they lose their Internet connection, will their position and capital still be protected?
Choosing a reliable broker
On the other hand, if a person trades with a broker worthy of their name (and commissions they are paid), he or she will stop any orders on their servers. And, as soon as an order is entered and confirmed by their software, the client should be protected. Do not take the art of day trading lightly. Choose a reliable broker with years of experience in providing a valuable service.