123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Marketing >> View Article

Protecting Yourself In A Fast Market

Profile Picture
By Author: Anthony Green
Total Articles: 36
Comment this article
Facebook ShareTwitter ShareGoogle+ ShareTwitter Share

The only surefire way to protect yourself in a fast market is to stay out of it. If you feel you must trade during a fast market there are a few things you can do to protect yourself.

Place a Limit Order

When trading a volatile or new stock, you can reduce your risk by placing a limit order specifying the maximum you're willing to pay to buy a stock or the minimum you'll accept to sell a stock.

Unlike a market order, which is an order to buy or sell at the best available price when the order is received in the marketplace, a limit order gives you price protection by ensuring you get your limit price or better. There's no guarantee your trade will be executed, but it's the most effective strategy for limiting your risk.

Market Order, Stop Order, Limit Order, What's the Difference?

A market order is an order to buy or sell a stock as soon as possible at the best price available. In a fast market situation, a market order can be very risky.

A stop order is an order to buy or sell a stock when the price reaches or passes a specified point (the stop price). When that happens, a stop ...
... order automatically becomes a market order and is executed at the best price available. In fast markets, however, after a stop order hits the stop price and becomes a market order, it can keep climbing or drop sharply - and ultimately be executed much higher or lower than originally specified.

A limit order is the safest way to trade in a fast market because it's an order to buy or sell a stock only at the specified price (the limit price) or better.

Know What You're Buying

What do you know about the company you're buying? Have you researched it? Buying a stock on impulse or hearsay isn't smart investing. Be sure the company you're buying a piece of is one you really want.

Be Aware of How the Trading Process Works

Educating yourself about investing is an ongoing process. If you're a new investor or need a review of trading procedures, pick up a like The Wall Street Journal Guide to Understanding Money and Investing, take a virtual trip to the New York Stock Exchange, or locate an investing club in your area through the American Association of Individual Investors.

Stay on Track with Your Investment Strategy

When you're considering a stock, first see if the company meets your investment objectives. If you haven't formulated an investment strategy yet, now is a good time to start. Begin by determining your goals and your time horizon, then choose the investments that will best meet them.

Weigh the Risk, Before You Click

Before you place a market order for a volatile stock, ask yourself how much you could afford to lose in the event of sweeping price fluctuations. Don't risk spending more than you can afford.

Timing Is Everything

If you're planning to place an opening market order, make sure your order is entered before 9:20 a.m. Eastern Time. Otherwise, your order may not queue until after the pre-open is completed. At the end of the day, enter market orders at least 10 minutes before closing or your order may not be executed.

Total Views: 285Word Count: 550See All articles From Author

Add Comment

Marketing Articles

1. Hobo E Services Is The Leading Digital Marketing Company In India
Author: Hobo e Services

2. Top Social Media Marketing Companies: Hobo E Services
Author: Hobo e Services

3. Finding Affordable Web Design Services In The Uk Without Compromising Quality
Author: Michael Dawson

4. Digital Marketing Company In Ghaziabad - Hobo E Services
Author: Hobo e Services

5. The Power Of Social Media In Real Estate: Top Agencies Transforming Realtor Brands
Author: Barry Elvis

6. Maintenance Tips For Ensuring Longevity Of Stainless Steel Flanges
Author: Nitech Stainless INC

7. Ways Consumer Insights Enhance Brand Reputation
Author: rohit

8. Boost Your Brand’s Success With Boostbrighter - India’s Most Trusted Digital Marketing Agency
Author: Shehnaznaz

9. Achieve Digital Success With Ed7 Group – The Trusted Agency In Kanpur
Author: Abhishek Mishra

10. Using Social Media As A B2b Lead Generation Tool
Author: tim seifert

11. Digital Marketing Agency In Ghaziabad: Hobo E Services
Author: Hobo e Services

12. Digital Marketing Company In India - Hobo E Services
Author: Hobo e Services

13. How To Write Captions For Instagram To Gain More Followers
Author: Emma Kate

14. What Are Digital Marketing Services?
Author: Sweety

15. Digital Marketing Agency In India: Hobo E Services
Author: Hobo e Services

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: