How To Set A Trailing Stop Loss On Webull App
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How to set a trailing
How to set a trailing stop loss on Webull app. Today, I’ll give you a general overview of what a trailing stop losing is. Why it might be beneficial for you to use it, and how to set it up on the Webull app. I’ve also did a video on how to set a take profit and stop loss order on the Webull app as well. So, if you want to learn that, you can check out the video here:
How To Set Take Profit And Stop Loss On Webull App
►How To Set Take Profit And Stop Loss ...
Collect your free stocks here with Webull:
►https://act.webull.com/i/JUBJdYxwsEwQ...
Investing With Webull For Beginners (Playlist):
►How To Open Up A Webull Account (Step...
So, for those who don’t know what a trailing stop loss is, it’s a sell order that you can place where you can also set the amount of loss you are willing to incur. It could be percentage amount or a dollar amount. And the important thing to note about a trailing stop loss is that it follows or aka “trails” the highest price of a stock, but it will never adjust downward.
So, for example, let say you have a share of a stock that’s currently trading around for $100/share and you set a trail amount for $5. So right from the start, you basically have like an order to sell at $95. If the stock goes up in value to $103/share, that stop price to sell will also go up and, in this case, it’ll now be set at $98. But if the stock price goes back down and starts trading around $100, the stop price will not be adjusting down. It’ll only be adjusted when the stock price reaches a higher high. And that’s the beauty of it. This will help you minimize your loss and potentially maximize your gains. Because let’s say the stock prices reaches to $120/shares and if the stock prices ever start taking a dive, it’ll automatically sell at $115/shares because we initially had set the trailing amount for $5, remember.
And if you were ever comparing the trailing stop loss to just an ordinary stop loss, for a stop loss, you’ll have to be constantly adjusting your stop price and potentially miss out on future gains.
Going back to the example of the stock price being $100/share. If you just had set a stop loss at $95, you could lose $5, because the trigger is at $95. It wouldn’t care if the stock prices go to $120/share or higher. So, you won’t have the opportunity to make money unless you manually go back to your account and adjust the stop loss or sell at market value. But with the trailing stop loss, if that stock’s highest price was $120/share you can gain $15 if the stock price ever drops because the stop price will automatically be updated. So, in this example, do you now see the difference? With just a regular stop loss, you can end up losing $5 whereas with a trailing stop loss, you can gain $15.
This doesn’t have a cap on your profits, but it’ll prevent you from losing more money.
And if you aren’t aware, the trailing stop loss is mostly used by day traders, because this helps them automate their day trades. It’ll be hard to keep track of every stock if they are day trading multiple stocks and manually having to input the trades. So just letting you know if you didn’t know about that. But that doesn’t mean you can’t use it on a day that you’re busy or working and it’s hard for you to keep track of the stock.
And if you’re thinking what’s a good trailing amount or percentage to set it at. Well, it’s honestly up to you to decide. You don’t want to it too close where if the stock goes down a little, it’ll trigger it, but far enough where you are comfortable of market fluctuation. Usually people set it within the 5% mark, but at the end of the day it honestly depends on the stock and the volatility of it.
Legal Disclosure: I'm not a financial advisor nor a certified public accountant. These videos are for entertainment/educational purposes based off of my personal opinions. Investing in any type of investment involves risk and you need to do your own research or seek out a licensed professional if necessary. There is no guarantee that you'll gain or lose on investments.
How To Set Take Profit And Stop Loss On Webull App
►How To Set Take Profit And Stop Loss ...
Collect your free stocks here with Webull:
►https://act.webull.com/i/JUBJdYxwsEwQ...
Investing With Webull For Beginners (Playlist):
►How To Open Up A Webull Account (Step...
So, for those who don’t know what a trailing stop loss is, it’s a sell order that you can place where you can also set the amount of loss you are willing to incur. It could be percentage amount or a dollar amount. And the important thing to note about a trailing stop loss is that it follows or aka “trails” the highest price of a stock, but it will never adjust downward.
So, for example, let say you have a share of a stock that’s currently trading around for $100/share and you set a trail amount for $5. So right from the start, you basically have like an order to sell at $95. If the stock goes up in value to $103/share, that stop price to sell will also go up and, in this case, it’ll now be set at $98. But if the stock price goes back down and starts trading around $100, the stop price will not be adjusting down. It’ll only be adjusted when the stock price reaches a higher high. And that’s the beauty of it. This will help you minimize your loss and potentially maximize your gains. Because let’s say the stock prices reaches to $120/shares and if the stock prices ever start taking a dive, it’ll automatically sell at $115/shares because we initially had set the trailing amount for $5, remember.
And if you were ever comparing the trailing stop loss to just an ordinary stop loss, for a stop loss, you’ll have to be constantly adjusting your stop price and potentially miss out on future gains.
Going back to the example of the stock price being $100/share. If you just had set a stop loss at $95, you could lose $5, because the trigger is at $95. It wouldn’t care if the stock prices go to $120/share or higher. So, you won’t have the opportunity to make money unless you manually go back to your account and adjust the stop loss or sell at market value. But with the trailing stop loss, if that stock’s highest price was $120/share you can gain $15 if the stock price ever drops because the stop price will automatically be updated. So, in this example, do you now see the difference? With just a regular stop loss, you can end up losing $5 whereas with a trailing stop loss, you can gain $15.
This doesn’t have a cap on your profits, but it’ll prevent you from losing more money.
And if you aren’t aware, the trailing stop loss is mostly used by day traders, because this helps them automate their day trades. It’ll be hard to keep track of every stock if they are day trading multiple stocks and manually having to input the trades. So just letting you know if you didn’t know about that. But that doesn’t mean you can’t use it on a day that you’re busy or working and it’s hard for you to keep track of the stock.
And if you’re thinking what’s a good trailing amount or percentage to set it at. Well, it’s honestly up to you to decide. You don’t want to it too close where if the stock goes down a little, it’ll trigger it, but far enough where you are comfortable of market fluctuation. Usually people set it within the 5% mark, but at the end of the day it honestly depends on the stock and the volatility of it.
Legal Disclosure: I'm not a financial advisor nor a certified public accountant. These videos are for entertainment/educational purposes based off of my personal opinions. Investing in any type of investment involves risk and you need to do your own research or seek out a licensed professional if necessary. There is no guarantee that you'll gain or lose on investments.
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