Page 282 - THE MARKET WHISPERER

278 PART 9 - The Trading Platform

Let us say you are holding 400 shares of ABC and are interested in
entering a stop market order if the stock drops to $29.70. The sequence of
actions you need is as follows:
1. Enter the stock symbol [1]
2. Enter the quantity of shares you want to protect in case of falling prices

[2]. You don’t need to enter the entire amount you hold.
3. Choose the order type [3]. In this case, ARCAS was chosen. We will learn

more on this later.
4. Click the SELL button [4].
5. An additional window will open: enter the type of order – market or

limit – to be executed if the price drops to the stop price [5].
6. Enter the stop price [6], which in this case is $29.7.
7. If at step [5] you chose a limit order, now you need to enter the limit

(e.g. $29.67). Not recommended!
8. Authorize the execution by clicking OK.
9. Check in the trade manager window, under the Orders tab, that the

order was lodged. If it does not appear, check why in the Messages box
and correct any errors.

• Short Stop Loss Order - When you short a stock, you are selling a stock
you borrowed from the broker, and you will want to protect your account
should the stock price go up. Your stop order will be a BUY rather than
a SELL (step 4 above), and your stop price (step 6 above) will be higher
than the stock’s current price. Other than that, the procedure is identical. It
implies that if the stock price rises to price X, please buy according to your
choice of a limit or market.

• Stop Order for Buying a Stock - A trader intending to buy a stock
breaking out is not always interested in following the stock for hours until
the breakout, if at all. It is possible to enter a conditional buy order.

For example: Let’s say that ABC is consolidating beneath the resistance
line at $30. You want to buy ABC only if it breaks out above $30. This is the
procedure:
1. Enter the stock symbol ABC.
2. Enter the quantity of shares you want to buy at the breakout: let’s say

400.
3. Choose the stop order, for example, ARCAS.
4. Click the buy button. Remember that the order is not executed

immediately.