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Forex Trading Blog
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Sun, 20 Jul 2008
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| The Stop-Loss-Order |
For investment professionals are stop-loss orders
and self-evidently an everyday tool. But for
private investors make much sense. You can save a
lot of losses.The stop-loss-order - known as
enlarge. (good article )
With a stop-loss orders, as a normal investment
mandate, determines a course of investors under the
current listing, in which a sales contract for the
paper is to be triggered. The meaning behind it:
How can investors already achieved profits, and
limit losses.
This raises the specified rate not stop price
guarantee: If the course that mark, it will become
the order automatically to a Well-Order. This
allows the selling rate also is below or above the
stop price.
Where does it stop the course?
What we are talking about the most important
question would be: How big is the distance selects
the stop-loss mark to the current rate? A triggered
stop-loss orders can be quite annoying when the
share on a weak day in their set too close to
stop-course "picked up" before they happily
continue their rise. Place the investors stop other
brand too deep, he may unnecessarily high rate
losses in purchasing before the order is triggered.
Selecting a matter of discretion
Vorneweg: A perfect rule of thumb does not exist.
Usually a margin of ten percent below the current
market price, such as the default values suitable.
In schwankungsfreudigeren TecDax securities such as
shares should the price far higher entspechend be
elected, such as 20 percent. Many market
participants to their original purchase price to in
no way hineinzulaufen losses. This is human, but
not necessarily rational.
In any case, the margin depending on their risk
appetite, the volatility of the stock market and
the current Constitution.
The best way is often in the selection of the
stop-at a rate charttechnischen-oriented brand,
which is below the technical picture clearly
eintrüben. A stop-loss mark, just below the strong
support of course, you can save a lot of losses.
That can about the lower edge of a long-term
trained trading margin or a previous history low.
Meaning depending on type
"The purpose of a stop-loss order is heavily
influenced by the orientation of the investor,"
explained Ralph Bressler, equity research analyst
at Bankhaus Lampe. "For a tradingorientierten
investor makes it all make sense to secure its
short-term profits." Medium-and long-term
investors, the less suitable tool, says the plant
expert: "Should long-term papers are kept, there is
a risk that short-term market distortions trigger
the orders, which the whole asset allocation, the
allocation of assets among the various asset
classes , Throw on the pile. " The sense of
stop-loss orders is also determined by the
investment horizon.
"After pulling sense
Important in a stop-loss strategy, the stop rate
gradually adjust upward if the share in an upward
trend, the rate gap is not too great to make. But
even this is sure instinct asked. Finally, most
banks and brokers with every order amending further
transaction costs, usually amounting to a limit fee.
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Posted 16:25
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