Monday 3 June 2013

Are You Looking For a Winning Stock Market Investment Strategy

Are you looking for a winning stock market investment strategy? Keep reading, in this article I am going to teach you a strategy that will save you a lot of money.
Basically this stock market investment strategy involves stop loss orders. This is an order placed with your broker that tells him to buy or sell a stock once it reaches a certain price. These kinds of orders are designed to limit your losses and can save you a lot of money.
Another advantage of stop loss orders is that you don't have to monitor how your stock is performing. You just set the order and should the stock price fall to a certain level it will be sold. One drawback is that the stop price could be activated by short term market fluctuations, to prevent this choose a stock-loss percentage that allows the stock to fluctuate comfortably.
This stock market investment strategy can be used for more than just limiting losses. It can also be used to lock in profits; this is called a trailing stop. The stop loss order is set at a percentage level below the current market price and adjusts as the price fluctuates.
Stop loss orders cost nothing to use, you will only be charged commission if the stop loss price is reached and the stock is sold. Also they allow your decisions to be free of emotion. Most people believe that a falling stock will rise again, they delay selling and hesitate. This causes them to continue losing money, the advantage of a stop loss order is that it frees you from decision making (once the stock falls to a certain price it gets sold no matter what).