Thursday, August 8, 2013

Non-guaranteed Stops risk management

Non-guaranteed Stops
   
Non-Guaranteed Stop orders let you trade with the peace of mind that your position will be closed if the market trends against your position.
A key difference from Guaranteed Stops is suggested in the title; Non-Guaranteed Stops carry no guarantee of protection against slippage should the market gap. This means that your position could be closed at a worse price than your Non-Guaranteed Stop level.
Unlike Guaranteed Stops, however, Non-Guaranteed Stops can be added to - and removed from - open positions at any point, not just on opening a trade. Their level can also be moved while the position is open, regardless of whether the underlying market is open or closed at the time. And they are free of charge.

Flexibility

Non-Guaranteed Stops provide the flexibility to alter your trading strategy on open positions, as the market moves.
You could add a Stop order to limit your risk of losses while you take your eye off the market for some time, or increase the level of your Stop order if the market has moved in your favour, for instance.
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