To The Moon

Hi, tigers. I receive all your questions and find that most of tigers want to learn about how to decide when to buy and sell stocks. @Ah Meng @rinl @aiyoh79 @maricel @LMSunshine and many other tigers asked when to buy and when to sell. I wanna know when I should cut loss. There has been many schools of thought. Let's learn together how to use this indicator on Tiger Trade app. Some retail investors prefer to cut losses by setting a fixed percentage, such as a 5% or 7% decline. But fixed percentage does not take into account that different stocks have different volatility. Some stocks with low volatility may indeed need a stop loss when it is down 5%; but for stocks with high volatility, there may often be a 5% drop in a day. Therefore, we should consider the different volatility of individual stocks. The ATR indicator can take the volatility of individual stocks into account. ATR Helps You Decide When to Sell ATR (Average True Range), as the name suggests, is the calculation of the true volatility range of each stock on a daily basis. The equation for calculating ATR is complicated, but we don't need to do the math because almost all trading platforms provide ATR indicator. All you need to do is click on this button and choose ATR on Tiger Trade app . On your desktop app The orange line in the chart is the stock's daily ATR. For example,$Pfizer(PFE)$ current ATR is 1.16. It means that for the last 20 days, Pfizer's stock price fluctuated within the range of 1.16$. Two Formulas of ATR Tell You When to Sell 1. The stock price you bought it - 2 x ATR= your stop-loss point Take Pfizer for example, today's ATR is 1.16. Suppose we buy Pfizer at the current price of $49.66, the stop-loss price is: 49.66 - 2* 1.16 = 47.34. When the stock price falls to/below 47.34, we should cut losses. 2. The price of recent high - 2 x ATR= your take-profit point Again using Pfizer as an example, let's say you buy Pfizer at the current price of $49.66. Pfizer's recent high was $54.93; and ATR for that day was $1.07. If Pfizer fell from the high to 54.93 - 2.14=52.79, you should take profit and close the position. Note: I use 2x in this formula but you can set this parameter between 1-3 times. Risk Warning There is no statistical advantage to using ATR for stop-loss or trailing take profit. However, it takes into account the volatility of individual stocks relative to fixed percentage. We should be aware that the stock market and the world situation are very volatile right now. With the possibility of a Black Swan event happening at any time, and we should not rely too much on the numbers. However, it can give us a practical and actionable trading discipline. 📒How to participate: Join our topic and introduce your familiar technical indicators: Introduce one simple indicator to help us know when to buy and sell. You can follow the format of this article and try to explain: 1. what is this indicator? 2. how to use this indicator? 3. what is the risk and advantage of this indicator? 🎁Reward: 1. One post with the highest quality will get a $10 stock voucher. 2. Three posts with the top 3 likes will get $5 stock voucher. 3. Every valid posts above 50 characters will get at least 50 tiger coins.Click to join our topic!