The markets have seen some turbulence lately. Knowing what to do during this rollercoaster ride can be difficult, but it doesn’t need to be. TradeStops tells you how to prepare for bear markets and equips you with the right tools.
Let’s get started!
The Position Card Page is Your Friend
Let’s pretend that you’ve invested in a few different stocks that are stopped out. You aren’t sure whether you should sell them yet or not.
The Position Card Page can display how you’re doing in that position and if it could be a good idea to hold the position a little while longer.
The Stopped-Out Position with a Gain
Our first example is Becton Dickson, BDX. This position has been stopped out over a month by the SSI as of this writing. If we were considering holding or selling, we could look at the gains or losses displayed in the upper right-hand corner of the Position Card Page.
For this position, we can see that it has had a gain in the portfolio. It is up to you to decide what amount of gain is acceptable to you if you want to keep a stopped-out position. To continue with this example, we’ll say we’re willing to keep BDX.
We’ll need to set another alert so that we have an exit strategy in place for BDX. If we go to the alerts tab on the Position Card Page, we can add an alert.
Since the VQ acts as a customized trailing stop for the position, we would add the VQ as our new stop loss strategy. Then, when the position is stopped out based on the VQ, we would know that it’s time to exit and follow our exit strategy.
The Stopped-Out Position with a Loss
Our next example is Invesco, IIM. This position has been stopped out over a month based on our SSI. If we were considering holding it, our next step could be to look at our gains and losses.
Here, we can see that we’ve only had a small loss for IIM. Now, we’d need to decide if we want to take on a new stop loss strategy or stick to the SSI stop loss strategy.
Just keep in mind how much you’re willing to lose on each investment and that those losses can add up in the end. Bottom line, you should stay diligent and stick to a stop-loss strategy once you make a decision.
The Stopped-Out Position with a Loss & VQ Stopped-Out
Our final example is Merck, MRK. This position has been in the SSI red zone for over 5 months. It has also been stopped out for the VQ (based on our entry date).
Here, we can see that we’ve had a loss in MRK. Because of these three things, we could choose to exit the trade. But remember – it’s always up to you to decide what loss and risk you’re willing to take on a trade before you exit it.
How to Track a Position You Sold
You might want to enter a position again after you sold it. The temptation might be to get into it, say, a month after the position was closed. Get it at a low price, right? Well, with TradeStops, you don’t have to guess about when to enter a position again.
When a position is closed in TradeStops, you can choose to be alerted when the position goes green again.
With this setting, you’ll know when’s the best time to re-enter the position. There’s no guessing involved!
Check Your Positions and Be Prepared
When your position is stopped out based on the SSI, you’ll need to make the final decision on whether you want to follow the SSI stop loss strategy or employ a new one. If you want to succeed while a bear market approaches, it’s imperative to stick to your strategy. Don’t let fear and other emotions rule you during these turbulent market times.
To your positions,
Customer Success Team