Stop Loss Order vs Price Alert

In last week’s blog, Emotionless Investing, Stop Loss Order and Price Alert generated some questions.

What’s the difference?

Stop Loss Order - An order to sell a stock when it reaches a certain price. The Stop Loss Order goal is to limit a loss. The Stop Loss Order removes the emotion from trading decisions. Keep in mind that execution is not guaranteed.

Price Alert - A notification sent (usually via email and/or text message) when a stock reaches the price that an investor has set. The goal here is for the investor to take an action (close position/open position) after receiving the Price Alert.

Which should I use?

There are arguments, debates, pros, and cons for both. The answer really is Investor’s preference.

Please view StockPicksForProfit Glossary.