This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Update on Apple Suppliers: 'Mind Your Stops!'

When you enter them with your brokerage firm, the market maker may see your willingness to sell at a price below the current price and conveniently match your order up with some big client who is looking to buy at that price.

In other words, I don't want the market makers to see my stop-loss or trailing stop-loss orders.

So I like to use a service like Tradestops, which just launched its latest version with many new bells and whistles including a position-sizing calculator and interactive charts so you can "back-test" different percentage trailing stop losses and see how they'd performed on your favorite stock holdings.

You can set trailing stop-loss alerts that will send you an email when your shares have reached the level where you've decided ahead of time that you want to sell them in order to lock in gains or prevent unacceptable losses.

As it says on its Web site, and we've probably all experienced, many investors experience two kinds of challenges: "Holding onto a loser too long in the hope of it one day recovering, only throwing in the towel when the loss finally becomes intolerable," or, "Making nice gains, only to get nervous during the pullback and sell for a small profit -- or even a loss -- and then watching the stock take off to new heights without you."

The only way I know to keep those two bad things from happening is to utilize the disciplines involved with carefully setting either a trailing stop-loss strategy or a stop-limit that protects you on the downside. You can also use this system to get alerts when the stocks you want to buy have corrected down to levels where you want to begin nibbling.

I'd encourage you to watch the video at TradeStops and to visit its home page linked above. Familiarize yourself with all its features, benefits and tools that will help make you a more disciplined investor. It helps to be able to override our emotions (especially fear and greed) and to set some of our investment goals when we're not in the thick of battle and suddenly pressed to make a decision.

Speaking of Apple stock: If you would have used a 25% trailing stop-loss you'd probably still own your shares through this amazing move skyward in the price of AAPL shares, as the chart below illustrates. Trailing stop losses can help you "stay in the game" with your favorite stock positions, especially when they suddenly move higher than you could have anticipated.

They'll also help you from selling too soon.

AAPL ChartAAPL data by YCharts

At the time of publication the author had no position in any of the companies mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.



Jim Cramer and Stephanie Link actively manage a real money portfolio for his charitable trust- enjoy advance notice of every trade, full access to the portfolio, and deep coverage of the latest economic events and market movements.

2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,456.53 -106.77 -0.64%
S&P 500 1,921.26 -9.41 -0.49%
NASDAQ 4,337.1120 -32.6610 -0.75%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs