If your like most people then it’s difficult to watch your stocks on the watch-list during market hours especially if you hold a job. There are a few ways to work around this issue and I will tell you how to do so when I give the entry prices and stops the night before the trading day on my website.
Stop limit orders – When I don’t have the time to watch my stocks on my list, I place stop limit orders and let my trading platform do the work for me. If you don’t know how to setup a stop loss order then simply ask your broker on how to do this with a attached stop loss order. I will explain more on attached stop loss orders as you read on. There are also stop market orders but I don’t recommend this as using stop market orders as this will increase the chance of slippage and possibly getting filled on a gap up and ruining your risk parameters.
There are some pros and cons to using stop limit orders:
- Fills you in at your exact order price with no slippage.
- Allows you to enter the right amount of share size by knowing your risk.
- Loss will be more or less defined.
- You may not get filled if price moves sharply or gaps up and you end up missing the trade.
- You might get only a partial fill.
Once you place your stop limit entry order then your next step is to place an attached stop loss order. Most brokers have this feature and if they don’t then think about moving to a different broker account as I don’t recommend entering a position without a stop loss order unless you can watch the markets all day. When entering a stop loss order I like to use a stop market order on stop losses instead of a stop limit. The reason being is I want to ensure I get hit out of a trade if it trades below my stop price. If we keep a stop limit order on our stop losses we may not get filled which might lead to larger losses and nobody wants that. Yes, we may get slippage or a possible gap down hitting us out at a bad price but its the safest option.
Setting an alert: This is the other option if your not interested in having your trading platform entering your positions automatically. Ask your broker if they can email/text you alerts on your phone. If this option is available then simply set your alert prices on your platform. Once you receive a message alerting you that stock XYZ is near your entry price, then just login to your account from your phone and manage it from there. The same alert goes for setting stop losses as well. Once your in the trade set an alert near your stop loss so you have time to react and exit the position.
These two ways are the best ways that I know to be a trader without having to be glued to the screens.
If you found this useful, then join me and my members and trade with us. Entries w/ stops and trade management to ride our winners. Visit AmyAtrade.com to register!