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Northern Illinois | you are understanding correctly. A sell stop gets you out of the market. The downside of using a sell stop is if your price gets hit and you are out of the market and the market turns around and continues higher you do not participate in the continued rally. I have sell stop orders in on my futures positions to lock in a profit and also on my stored grain at the elevator. As many have said it is difficult to sell in a down trending market. We sometimes have that deer in the headlights look and can not pull the trigger. That is why I like having orders in. I have layered orders in at 1/4 intervals. As the market has gone up I have cancelled the lowest priced order and moved it up so it is now the highest order. It will not net me as much as if I sell it all at the high but will be a nice average. If the market gets high enough I will just cancel all the orders and just sell it all at one time. But at least I am protected in case the bottom falls out | |
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Explain sell stops to me?
