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:

US stocks

US fractional shares

HK stock grey market trading

Futures

Single-leg options

Warrants/CBBCs

Take-Profit

x

x

x

Stop-Loss

x

x

x

x

Stop-Limit

x

x

x

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%

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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  • TotalTechnical
    ·2023-05-31
    TOP
    Another stop loss strategy popular by professional traders is using a trailing Average True Range (ATR) stop loss. For example on a daily chart, you take the ATR value (typically 14 sessions is default) for the current day candle and multiply by 2 or 3 times the value of the ATR. You then subtract this value from the low of the day (some people use the close price) and that becomes your stop loss level. You can then enter this calculated trailing ATR as the price in your trailing stop loss order. When the price action moves up, the calculated trailing ATR will also move up ensuring u capture the most value from and uptrend (if going long). When the price reverses and falls below your recent calculated trailing ATR level, that would be your take profit level. Notice this strategy doesn't have a predefined take profit level as it relies on riding the momentum as much as possible and not exiting too early on a trade. [smile]
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    • TotalTechnicalReplying tomizzmo
      Yes that's right. You can keep the ATR tight say use 1ATR initially to keep a tight stop. If the price continues its momentum up you can give it more room and change to a 2 or 3ATR value.
      2023-06-01
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    • mizzmo
      So basically, this strategy helps you set a stop loss that follows the market's movement, right?
      2023-05-31
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    • TigerTradingNotes
      [强]Thank you for your detailed explanation of the trailing ATR stop loss strategy! It's indeed a popular approach among professional traders. 
      2023-05-31
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  • icycrystal
    ·2023-05-31
    TOP
    I think another strategy is to flow with the market not against it. set stop loss or take profit around market price so you know you are not setting.too low or setting too high.
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    • koolgal
      Thanks for sharing your awesome strategy 😍😍😍
      2023-06-06
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    • TigerTradingNotes
      Agree with you[握手]
      2023-06-01
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  • LMSunshine
    ·2023-05-31
    TOP
    🐯🐯🐯 new to investing can consider using resistance and support levels for take-profit orders (TPO). Resistance means the stock price will have difficulty going above this level unless there's a significant reason to do so (e.g. earnings are above estimates/new product launches/new businesses deals). Support means the stock price is less likely to drop below this level unless there's 👎👎🗞🗞🗞 In an uptrend, we can set our TPO to be a little lower than resistance levels and in a downtrend, we can set our TPO to be a little higher than support levels😉 Friends come read how to use this new app fucnction to help us secure profits and stop loss. Comment and repost for 5-50coins🥰 @SR050321 @CYKuan @HelenJanet @BenjiFuji @rL @GoodLife99 @Universe宇宙 @SirBahamut @melson @Asphen @Ah_Meng @Mrzorro @b1uesky @SPOT_ON @Kaixiang @Success88 @pekss @Jadenkho @Zarkness @MHh @Omega88 @Yonhuat @Ericdao @Shyon @amroui @StickyRice @StarLuck @Tigress02 @kungpao @MeowKitty
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    • SirBahamut
      Oh i didnt comment hahaha
      2023-06-02
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    • LMSunshineReplying toSirBahamut
      @SirBahamut Buddy cant find your comment to like? Rem to comment and repost for 5-50 coins❣️ Share your insightful experience with us🥰
      2023-06-02
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    • LMSunshineReplying toSirBahamut
      Thanks buddy🥰
      2023-06-02
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  • SR050321
    ·2023-05-31
    TOP
    Good features 👍 thank you Tiger 😍 we indeed need to learn and check what possible way to reduce risk, maximize profit, holding for passive income. If possible to get the best result in investment using the right strategy and app 😊
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    • LMSunshineReplying toSR050321
      Me too…twice i travelled the same stock go up then when I come back dip…faintz…I try if the order works I post about it❣️No la…not resourceful or age. I just spend time and learn slowly😅 still a lot i don’t know also🫠🫠🫠
      2023-06-01
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    • SR050321Replying toLMSunshine
      I saw yr comment, i will try too 😊 thank you. I was on holiday last week so i didnot care stock market, when oct i was on holiday, market dip so badly, this time dip not as bad, kind of immune liao, if dip badly i can DCA my blue chips 😅 i am not as resourceful as you…dont have the strength to learn more 😭 maybe i am old liao haha
      2023-06-01
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    • LMSunshine
      This new order type so useful. I‘m going to try soon. So sad 2 weeks ago i was travelling miss taking profit then this week the stock went back into red🙁 Hopefully with this new take profit order, i wont be 3rd time unlucky
      2023-06-01
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  • Shyon
    ·2023-05-31
    TOP
    For me, a few strategies I use usually.
    1) If the stock keep rallies, with big green candles consecutively, I will refer to the RSI (14), as long as it hits 90, I will sell the stock and lock my profit.

    2) For the support, if the stock is in uptrend during short term, I will use ema10 as support. Once the candle fall below ema10, I will either cut loss or lock my profit.

    3) For midterm holding, I will refer to ema60 as my cut loss or lock profit points.

    For me, I will have a look on the latest price every few days and adjust my trigger price for my take profit or stop loss orders.

    Hope this helps! Join us and share you strategies guys. @koolgal @rL @Universe宇宙 @GoodLife99 @Aqa @LMSunshine @melson

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    • ShyonReplying togleezy
      I use ema line as support level most of the time. 5 or 10 for short term. As long as the stock price drops below the ema line, we can consider that the support is broken.
      2023-05-31
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    • ShyonReplying tocutzi
      If really big big rally, I will lock profit at the third green big candle, using three white soldiers pattern. Else, I will just refer to RSI(14). Will sell once it hits 90.
      2023-05-31
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    • gleezy
      What is your go-to strategy for determining support levels?
      2023-05-31
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  • Aqa
    ·2023-05-31
    TOP
    It is very useful to set “Stop-Loss” and “Take-Profit” orders on our Tiger Apps. Currently we can set both tgese two orders to our basic orders. Configure our own stop-loss and take-profit points before placing our orders. Tiger Apos allow us to choose from three types of orders. Thanks @TigerTradingNotes for showing us the specific instructions on how to set orders on our Tiger apps.
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    • Aqa
      Thanks @TigerTradingNotes You want ti know my buy and seell based on Technical Analysis?
      2023-06-02
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    • KYHBKOReplying toAqa
      important to take profits and stop loss.
      2023-06-02
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    • ZEROHERO
      Here you go! 😉
      2023-06-02
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  • MHh
    ·2023-06-01
    TOP

    I think I'm a simple investor. Generally buy and hold strategy. On occasions I do want to sell, I simply set the price to sell[LOL] 

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  • nerdbull1669
    ·2023-06-01
    TOP
    I practise taking profit at different stages (scaling out) for large position, this will help me to take advantage once I determine that the stock is on a good upward trend. A use of both technical indicators and the recommendation from my A.I. model do help to determine how much at each stage.
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    • TigerTradingNotesReplying tonerdbull1669
      [握手]
      2023-06-05
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    • nerdbull1669Replying toTigerTradingNotes
      thank you for the coins. Hope fellow tigers have benefitted from my sharing of some of my trading strategy, shall share more.
      2023-06-02
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    • TigerTradingNotes
      Smart approach, especially for large positions!![财迷]
      2023-06-02
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  • 这种策略其实短炒客的策略,见好就收,设置止损位,我亲戚试过,赚点生活费可以,想实现高增长几乎不可能。而且以后GPT量化交易普及后,这种交易方法的难度更大。
    Reply
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    • TigerTradingNotes
      不光适用于短线哦,长期投资的话,可以设置订单有效期哦,设好止盈止损位即可~~
      2023-06-01
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    • 第N次大变革大分流Replying tosnappyz
      难跟上
      2023-05-31
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    • snappyz
      听说GPT量化交易很火,这种老式的交易方式真的能跟得上吗?
      2023-05-31
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  • Bubbledrea
    ·2023-06-02
    TOP

    Very important for those who have no time to track the market!

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  • koolgal
    ·2023-06-06
    TOP

    🌟🌟🌟I like to use a stock's 50 day Moving Average with its 200 day Moving Average to determine its trend.  If its 50 day Moving Average crosses above its 200 day Moving Average then a Golden Cross occurs. 

    For example $CrowdStrike Holdings, Inc.(CRWD)$  50 Day Moving Average is now higher than its 200 Day Moving Average indicating a Golden Cross has now occurred for the stock.  Analysts has rated $CrowdStrike Holdings, Inc.(CRWD)$  as a BUY with a target price of USD 175.44 indicating an upside potential of 14%.

    This is a great strategy for me to find winning stocks that I can maximise my profits. 

    @TigerTradingNotes  

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    • koolgalReplying toBenjiFuji
      My pleasure
      2023-06-06
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    • BenjiFujiReplying tokoolgal
      Thanks [Strong][Strong][Strong]
      2023-06-06
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    • koolgalReplying toBenjiFuji
      I use investing.com.  I don't think Tiger App has this function.
      2023-06-06
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    View more 6 comments
  • LMSunshine
    ·2023-05-31
    TOP

    🐯🐯🐯 new to investing can consider using resistance and support levels for take-profit orders (TPO). Resistance means the stock price will have difficulty going above this level unless there's a significant reason to do so (e.g. earnings are above estimates/new product launches/new businesses deals). Support means the stock price is less likely to drop below this level unless there's 👎👎🗞🗞🗞 In an uptrend, we can set our TPO to be a little lower than resistance levels and in a downtrend, we can set our TPO to be a little higher than support levels😉 @TigerTradingNotes 

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    • Shyon
      😍😍😍 Nice sharing
      2023-05-31
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    • Shyon
      Thanks for sharing.
      2023-05-31
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  • CL_Wong
    ·2023-06-05
    TOP
    My strategy is simple: “buy-and-hold” strategy. I will buy when the stocks’ price falls and hold. I will sell the stocks when it makes a capital gain. Of course the stock I buy has a consistent track record of generating earnings from sales.
    @Thonyaunn @MeowKitty @Derrick 1234 share your stop-loss and take-profit strategies and you have a chance to receive 50 Tiger Coins as a reward
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    • koolgal
      That's a brilliant strategy😍😍😍Thanks for sharing your insights 🌈🌈🌈
      2023-06-06
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  • Success88
    ·2023-06-01
    TOP
    Good Feature to give a headup to busy person when invest in stock. Love this function
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  • KryZ
    ·2023-06-01
    TOP
    Great topic of interest. Thank you  @TigerTradingNotes. Very insightful to learn from fellow 🐅  how they utilise Stop Loss /Take Profit features in their trading strategies.
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  • Yonhuat
    ·2023-05-31
    TOP
    The market makers will come get your stop loss
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    • riffy
      It's frustrating when the market makers go after your stop loss, but just keep your cool and stay focused on your trading strategy😎
      2023-05-31
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    • twiddly
      Sometimes the market makers can be unpredictable, but that's just how the market works. Don't let it get you down!
      2023-05-31
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  • Yossarian_
    ·2023-06-02
    TOP
    I am an ordinary investor.  if necessary, bought at the current price, if necessary, sold at the current price.
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  • LMSunshine
    ·2023-06-01
    @TigerTradingNotes Can share how to use trailing stop order with step by step screenshots in next post?
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  • SirBahamut
    ·2023-06-02
    TOP
    Useful ”stop-loss” and “take-profit” tips for Tiger App users! Thank you @TigerTradingNotes !
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  • icycrystal
    ·2023-05-31
    @Dri  @erer  @poe  @jeffnwj  @pw please share your thoughts [smile] [smile] [smile]
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