A "High-Profitability" Trading Strategy - Stop-Loss and Take-Profit

On October 19, 1987, the Dow Jones Industrial Average plummeted from a high of 2,246.74 points to 1,738.74 points, experiencing a 508-point drop. The Chicago Mercantile Exchange witnessed a staggering 28.6% decline in the S&P 500 index futures for December contracts throughout the day.

In the face of this situation, many investors not only failed to implement stop-loss measures but also increased their buying. However, professional trader Martin Schwartz demonstrated his risk awareness by promptly implementing a stop-loss strategy.

This case highlights the importance of considering stop-loss criteria and plans before entering the market. When market conditions deviate, decisive actions should be taken.

How to Set Stop-Loss and Take-Profit Orders

Tiger currently provides the functionality to attach stop-loss and take-profit orders to basic orders. Before placing an order, you can configure the stop-loss and take-profit points. You can choose from three types: "Take-Profit," "Stop-Loss Market Order," and "Stop-Loss Limit Order." A master order can have either a take-profit order or a stop-loss order attached, or both. When one order is executed, the other will be automatically canceled.

For market orders, once the stock price reaches the trigger price, the system will automatically submit a market buy or sell order. For limit orders, once the stock price reaches the trigger price, the system will automatically submit a limit buy or sell order that you have set.

Take-profit orders are similar to stop-loss orders, but the difference lies in the fact that take-profit sell orders are placed above the current market price, while stop-loss limit sell orders are placed below the current market price.

Let's take an example:

Suppose you want to buy a long position in a stock with a main order which sets the price at $10. You can attach a take-profit sell order with a trigger price of $15 and a stop-loss limit sell order with a trigger price of $8 and an execution price of $7. In this case, when the stock price rises to $15 or above, the corresponding limit order will be automatically submitted, possibly resulting in a trade at $15 or a better price. When the stock price drops to $8, the $7 limit order will be automatically submitted, possibly resulting in a trade executed at $7 or a higher price.

Specific Instructions:

• After setting the parameters for the main order, click on "Take-Profit/Stop-Loss" below and select the type of additional order.

• You can set the take-profit and stop-loss points by selecting "Trigger Price," "Profit/Loss Percentage," or "Profit/Loss Amount." Once set, click on "Place Order."

Here are some "tips" for using take-profit orders:

1. Order Placement Time: You can place orders at any time, but they cannot be executed before or after market hours.

2. Order Duration: You can customize the order duration by selecting "Day" or "Good till Canceled." If you choose "Day" and the order is not fully executed during the specified duration, the system will automatically cancel it. If you choose "Good till Canceled," the order will remain active until the conditions are met.

3. Supported Trading Instruments:

4、Stop-loss and take-profit orders can be placed on various trading instruments. You can use up to two coupons for additional bracket orders.

Apart from stop-loss and take-profit orders, what other advanced order types are you interested in? Share your stop-loss and take-profit strategies in the comments section and get a chance to receive 50 Tiger Coins as a reward!

• How to participate: Leave a comment on this post and repost it.

• Activity duration: 31st May- 8th June

• Prize：

1. All users who comment and repost will receive 5 Tiger Coins.

2. Five users will receive 50 Tiger Coins for the top-scored comments.

Scoring Criteria:

1. Subjective evaluation of comment quality: 50%

2. Number of likes and interactive engagement: 50%