Posted by HOSEILIAU > 2014-04-24 10:37 | Report Abuse

A STOP LOSS SYSTEM IS A VERY USEFUL TOOL INVESTOR CAN USE TO PREVENT LARGE LOSSES ON SHARES. SETTING A STOP LOSS MEAN DECIDING AT WHAT POINT YOU SELL IF A SHARE'S PRICE FALLS. THE IMPORTANT THING IS DECIDING AT WHAT LEVEL OF LOSS TO SET YOUR STOP. THIS DEPENDS ON WHAT TYPE OF INVESTOR YOU ARE. PEOPLE WHO TRADE OFTEN AND TEND TO HOLD SHARES FOR A SHORT PERIOD OF TIME MAY SET THE RATE AT 5%. LONGER TERM INVESTORS MAY NOT SET STOP LOSS UNTIL A SHARE FALLEN BY AS MUCH AS 15%...(ref.UK NET GUIDE)