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I have a few stocks and my normal way of selling them is to watch yahoo and if they hit a certain price I decide if I should sell. I want to be a bit more automatic and I see these orders are available:
Limit
Stop
Stop Limit
Trailing Stop
Which one is the best to use to say that if a stock hits this price or below sell it?
A trailing stop will sell X shares at some percentage below the current market price. Putting in this order with a 10% trailing stop when the stock price is $50 will sell the stock when it hits $45. It's a market order at that point (see below).
A stop order will sell the stock when it reaches a certain price. The stop order becomes a market order when the magic price is hit. This means that you may not sell it at or below your price when the order is executed. But the stock will sell faster because the trader must execute.
A stop limit order is the same as a stop order, except the stock won't be sold if it can't be gotten for the price. As a result, the sell may not be executed.
More information here.
