Thursday, March 10, 2005
Beware of trailing stops
Scott has his own story in the comments section of yesterday's post about how trailing stops can hurt the unwary trader (especially in illiquid stocks). Let me add my own story: I placed a trailing stop loss on CTIB today. The stop got hit at @2.18 but my shares sold for $2.03! With a sell order for 2,500 shares, that works out to a pretty big sum of money that I left on the table. Last time I do that. I think it's back to the good 'ol tested and true limit order for me. Anyway, my portfolio continues to spiral down after hitting an all time high of over 407K back on Tuesday. I'm down below 400K now. Hopefully tomorrow will be a good trading day and I'll be able to finish above that magic threshold.
At least your stop order got you out. The stock is trading much lower than where you got out at. Using a limit order you may have never gotten out.Post a Comment