May 31: Trailing Stop Orders in Stock Trading
In the stock market realm, one way to protect all your gains from purchased stock and to limit the amount of losses is to place a trailing stop order which sets the stop price at a certain amount. If the stock market prices rise, then so does the stop price, however, if the stock market prices decrease, the stop price remains the same. This allows the investor to set a limit on the maximum possible loss he or she is willing to accept, however, the amount of gain is limitless.