Use Conditional Orders
A conditional order is simply an order you place with your broker, to undertake an action (e.g. buying or selling a share) based on a certain condition specified by you.
One of the most common conditional orders involves instructing your broker to monitor a particular stock on your behalf, and should the share price reach your nominated target, to buy (or sell) it for you.
There are basically two parts to a conditional order. The first part is your order to buy or sell a particular stock. The second part is the conditions you set. These conditions include the price the stock must reach and the quantity of stock you want to trade. Your broker then monitors the market, and as soon as your conditions are met, your order sent to the market for execution.
Conditional orders can be very useful in several ways. Firstly, they can save you a lot of time spent watching the market minute by minute. Secondly, they can help you think ahead and set out a plan for what you are going to do. Conditional orders can help you automatically stick to a trading strategy as there is no need to keep watching the market - when the conditions you have nominated occur, your request is actioned.
Of course there are more complex conditional orders that go beyond simple price and volume conditions, through to advanced price tracking and straddle orders. Ask your broker what sorts of conditional orders they accept.
Conditional orders are very much part of the wise-owl.com approach, because as part of our stringent risk management protocols, we nominate Stop Loss and Profit Stop Levels with each recommendation.
These types of orders are also advantageous in that they can take the emotion out of the trade no need to agonise over your decision once the order is set. And they can also not only help you develop a more focused trading plan, but also help you lock in profits and minimise losses.
