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But are stop-loss positions guaranteed to be triggered ? What if there are no buyers in a plunging market ?
by arjn 14y ago
But are stop-loss positions guaranteed to be triggered ? What if there are no buyers in a plunging market ?
- inthewoods 14y agoNo - but this demonstrates the mind-state of a full-time trader. Full-time traders also build that into their mindset, along with the idea of long-tail events.
- TDL 14y agoA stop loss is basically the point where a trader will dump their stock (most traders don't even maintain stop-loss orders since they are often times hunted by more sophisticated players.) It is a clear marker where the trader is wrong & the trader will recognize the loss, preserve capital, & wait for the next setup. So if the stop is @ $10 & the only offer is not until $9.75, a trader should take the loss @ $9.75 in order to avoid an even deeper loss. A stop loss is merely one mechanism in a traders risk management strategy. [Minor edits]