Buy, Sell, and Stop-loss orders

All trading techniques are designed to give the trader actual buy and sell “ signals,” or indications that it is good time or price to buy or (cover a short) or sell or (go short) . Some methods also show at what future price traders should Start to buy or sell. Brokers need to know when price breaks that level.

Prudent traders also realize that even the best technique can get them into losing situations. These traders use “ stop-loss orders.” A stop-loss order is placed below the price of the entry order or above the price of an exit order. If the price goes against, them their brokers have an automatic order to close out the position when price reaches that stop-loss level, handing the traders a small, controlled loss. In this way, they avoid surprises and control their exposure.