stop loss 8%

(4 posts)

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  1. paolo4
    Member

    Hello everyone,
    I was wondering if someone can help me out with the "8% exit strategy" because it's still a bit of a mystery to me. The question is: when you set the "8% exit strategy", do you take into consideration the "highest overall peak" or the "most recent peak"?. I make myself clearer with an example: I buy an ETF at 100, it goes up to 150, it goes down to 130 and goes back up to 140 and drops a lot to the point a I need to sell. (Are you with me?) Which price a need to sell the etf at?
    Could you please tell me?

    I much appreciate

    Posted 2 years ago #

  2. Donato
    Member

    Hi Paolo . . .
    I think Tom's 8% exit strategy says to sell if it falls 8% off a recent high. So that means your stop would have been placed at 138 after reaching the high of 150. There may be latitude, like using the close of the day price instead of the intraday price, I can't remember. But that may also have something to do with personal preferences and how active you want or can be.

    You may want to click on the top link under popular posts on the home page at this web site to study it further.

    Good Luck

    Posted 2 years ago #

  3. Denny
    Member

    The 8% exit strategy is really very simple. It begins from the moment you buy the security. Set your 8% sell stop-loss order from the price you bought it for. You buy at $100 & if it went straight down, your stop-loss order would trigger at $92. If the price goes up, you cancel the old order and put in a new one at 8% under the new higher price. Suppose it goes to $125, you cancel the latest sell order and put in a new one for $115. You only raise the "sell stop-loss". You never lower it. You doen't have to raise it daily, but only when the price moves enough that you feel it is needed. To sum up. Your 8% exit is 8% under the highest price the ETF has reached from the time you bought it. Some brokerages offer trailing stop-loss orders which automaticaly follow the price upward. In that case, you choose your % exit strategy, set it and forget it, just like the Ronco TV Promo.

    Posted 2 years ago #

  4. paolo4
    Member

    Thank you Donato, thank you Denny, I really appreciate

    paolo

    Posted 2 years ago #

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