The concept of `average true range', commonly referred to as ATR, is a measure of a security's volatility.The true range of a security for any given day is the greatest of the following three distances: 1.The distance from yesterday's close to today's high 2.The distance from yesterday's close to today's low 3.The distance from today's high to today's low The average true range is a moving average of the true ranges. Google: stop loss ATR
Something tech wrong on the platform with your own post 'Should one have a stop loss in place... ' hence my reply here: Certainly to prevent a catastrophy for yourself. If you have the capacity, do sell off shares in your portfolio with the lower potential (according to your strategy and research) to the extent of your current profit margin = hedging. The pull back which could be incurred at any time might disgust you if a balanced approach with investing and profit taking is not struck. OMI.
there are too many variables for one basket answer but i think you need to determine if you're a longer term investor in which case it shouldn't really matter or if you have some trading exposure. i still think a stop loss should be kept because at some point you would need to keep your profits should things start to go pear. oct 2008 anyone? maybe consider hedging yourself with some short cfd's if you feel there's more to lose than to gain at this point. you could then reinvest any profits on these short positions back into your positions at a lower price. also you would be receiving interest at quite a decent interest rate so there's also that to consider. that's just one tool i would use to avoid actual realisation. a lot of the guys would probably tell you if you are a long term investor then don't bother about stop losses. as long as you can sleep at night i guess? as always there's tax to consider so keep that in mind as well when realising any profits. what are your views?