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Say I bought a stock at $100.

Now in the morning I am expecting the stop to increase in value.

If I say sell at $102, it will sell as it spikes.

Now say it ends up climbing to $105 before declining, I sold at $102 but lost the potential of $3 as I sold "early".

Is there a way to say:

  1. if it reaches $102
  2. now its at $102, if it drops by .25 sell at $101.75
  3. if it increases in value, moving the .25 cent sliding

So say it goes to $103.5, but then suddenly drops to $103.24 then it should sell.

Is this possible to setup in my trading platform?

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  • Which trading platform are you using? It's possible in ToS and I assume others.
    – Hart CO
    Nov 12, 2020 at 21:21
  • @HartCO You can assume ToS, I can then research into mine as it should be similar. Nov 12, 2020 at 21:27
  • 1
    Trailing stop loss: thebalance.com/….
    – Hart CO
    Nov 12, 2020 at 21:29

1 Answer 1

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A trailing stop order will achieve this. For a long position, it sets the stop price at a fixed amount below the market price. If the market price rises, the stop loss price rises by same amount but if the stock price falls, the stop loss price remains the same.

For example, you buy XYZ at $20 and you set the stop at 25 cents. If the price drops to $19.75, it triggers a sell order.

Suppose XYZ rises to $22 without dropping 25 cents. At $22, the stop is $21.75. If XYZ then drops to $21.75, it triggers a sell order.

The trailing stop can be placed at a defined percentage or dollar amount away from a security's current market price.

There are basic order types as well as more complex orders. Not all brokers offer the complex orders.

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  • I don't want it to trigger anything until it e.g. reaches $22, then start this .25 sliding stop order. possible? Nov 12, 2020 at 22:13
  • I think that a conditional orders would be applicable. This allows you to attach one or more stipulations that must be true before the order can be submitted. I do not use these so I can't provide details. This is one of a number of sophisticated order types which typical discount brokers tend not to offer. Nov 12, 2020 at 22:55
  • I apologize if I'm pointing out the obvious, but be aware that even if you set a trailing stop order at 25 cents, the price might drop by more than 25 cents before your sell order goes through. This isn't just a timing issue; stock prices over time are discrete, not continuous.
    – Brian
    Nov 18, 2020 at 17:10

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