Online Stock Trading and Investment: An Introduction to Conditional Order Trading Strategies

Online Stock Trading and Investment: An Introduction to Conditional Order Trading Strategies

Experienced traders understand that money and risk management, together with strict discipline using stop losses are the main keys to survival and long-term profitability of the market - in fact I believe these are more important than which stocks you buy.

The main advantage in going one step further and use the "Conditional Order Trading Strategies that you can continue your daily activity, such as" safe in the knowledge that if all the shares or stock to fall to a predetermined level, then your broker will stop losses act as a third party on your behalf and close the trade if your predetermined stop loss level is activated.

Some of the popular resource stocks have fallen savagely in recent weeks. Many experienced traders have exited before the profit or loss in an open city became too great

Others may have frozen, like my article on EzineArticles.com for "difficulty in taking stop losses. If so, they have subscribed for access PS - they have bought and are now frantically hope and prayer. When individual stocks or the markets again, they often turn quickly, as months of gradual growth can be wiped off the board in days - sometimes hours.

In my articles to learn Jim Berg and other strategies which are incorporated into the use of stop losses initial capital to protect, then trailing stop loss to protect open profits. We have discussed the use of different types of stop losses:
# Weekly stops for long-term investors - that two consective closes at the end of the week means "sell" on Monday of next week.

# Daily stops for short term trading - using strategies Jim Berg is that these are actioned as follows:

# Initial stop - set within the most recent significant low before entry (not more than 10% below current price, otherwise choose another material) - sells the next day if closes below one day. This initial visit is used for long-term investors Mon action has first been purchased.

# Trailing stop - after the stock price moved up enough - sell the next day if it closes two days under

# Intraday conditional stops - usually used by day traders live, but can also be used by short term traders and long-term investors, as defined and discussed below.

We have shown that increasing the bullish market, there were cases where the use of intraday conditional stops resulted in premature closure of the trade - as some of these shares are back in the day and continued their growth.

A trader with a conditional stop at that time would have two ways to look at this:

i)-ve-point disappointment to be excluded from trade too early

ii) + Ve vantage point - pleased that his insurance policy works and protect him in case of steep decline.

For those who use the intraday conditional stops in recent weeks, their insurance really began as they will have home from work (or on the golf course, etc.) and found that many of their probation orders to sell if prices hit certain value will have been activated. Their trades will be closed by their conditional stop loss facility, for example, as outlined in the DFS shares, a licensed broker in Sydney.

The main advantage in using such kind of service is that you can continue your daily activity, such as "safe in the knowledge that if all the shares or stock to fall to a predetermined level, then they will act as a third party on your behalf - and close of trade.

For those who waited for the closing under the stop loss level in the last few weeks, they may have experienced different levels of emotion than their counterparts that use a conditional stop loss orders and that his craft had closed much earlier.

The real test, then come to those who are their shares trading well below their stops. Conditional stop loss user, they do not have to go through this test as their trades had already been closed days ago. There are advantages in both approaches. The main lesson is that each of us should work out as part of our personal trading plan, whether we use:

# Weekly charts and weekly stops or

# Daily lists closes 1 or 2 days below stops or

# Weekly or daily charts with intraday conditional stops

Traders and investors who know they have the "freezing problem" may decide to use intraday stops, regardless. They know from personal experience that they would rather have someone else act on behalf of its earlier level of pain to go through not being able to pull the trigger themselves when they put the actual test.

For those who choose a conditional break, then be aware that there is a significant risk, but the possibility of early closure of the trade.

If there are very few buyers queued in the supply stack, then there is a real possibility that there could be unnecessary and artificial cascade of prices, caused by computers electronic broker dumping shares in a domino effect in hundredths of a second and subsequent prices rebounding often only a few minutes later as bargain hunters chase up prices.

I wrote about exit strategies and the subject at length in my original work for newsletter Daryl Guppy before Jim Berg and I started our own. They are now re-published in my 'Atkinson-Guppy Articles' ebook that I called this phenomenon "avalanche sale.

It showed a big advantage in DFS were found using Origin was that they provide a service "hybrid" - as they have people to really sell the place out of order after listening to conditionally stop automatically activates an alarm goes off.

Their experienced staff can then follow the screen and see if auto sales avalanche happens or not - then decide whether or not to set a sell order on your behalf, according to your instructions.

Max Lewis, an old friend of mine who founded the International Metashare, truly a pioneer in the use of conditional stop loss orders in Australia in late 2000. For those who want to know more about this subject, I Conditional his unique ebook "Order of trading strategies (COTS) is a" must read ".