Think or Swim Tutorial - Placing Stop Orders & Stop Limit Orders (Stop Loss)

This tutorial explains how to use the Risk Management Orders in the Think or Swim Trading Platform. By the end of this article you will be able to easily place Stop Orders & Stop Limit Orders on your own. If you find this tutorial interesting read also ThinkorSwim Tutorial - How to set Stop Orders (MKT) & StopLimit Orders (LMT).

How to place the most rewarding options strategies from scratch? Visit my website at www.FromZeroToOptions.com to get tutorials, instructions, articles and much more stocks and options related.

---------------------------------------------------------------------------------------------------------------

The two basic types of Stop Orders are: the Stop Order at the Market (MKT) and the Stop Limit Order (LMT).

Stop Orders at the Market (MKT)

Placing a Stop Order (MKT) guarantees that your order will be executed, but it can not guarantee the price which your order will be filled at.

Stop Limit Orders (LMT)

Placing a Stop Limit Order guarantees the price that you receive, but it can not guarantee the execution.

Let’s suppose that you buy a stock at $50 and you place your Stop Order at $48. Now if the stock raises nothing happens, if the stock drops till $48,01 still nothing happens, but if the price goes at or below $48 the system will follow the instruction you have previously set and a sell order will be activated.

Because the stop price is nothing more than an activation point, you have to be aware and take in your mind that stops do not necessarily prevent losses, because the stock price may gap far below the stop price. They are only tools and have limitations, as a result you are not guaranteed to lock in profit just because you are using Stops. It is also the reason why the Security Exchange Commission (SEC) has banned the use of the “Stop Loss” term by professionals.

Free Tutorials - Stocks, Options and ThinkorSwim. Click Here.

Using the “Trade” Tab

Let’s start clicking on the “Trade” Tab on the up left corner of the Think or Swim desktop based software. You buy 100 shares of Microsoft Corporation (Ticker MSFT) and now you want to place a Stop Order. First of all, you have to tape in the “Symbol” box the Ticker you are interested in. Let’s tape in MSFT and click enter. You will see opening down this box a menu of this type:Underlying,Trade Grid,Options. At the moment you are interested only in the menuUnderlyingin which you will find information related to the Stock.

---------------------------------------------------------------------------------------------------------------

Do not forget to visit my website at www.FromZeroToOptions.com to get tutorials, instructions, articles and much more stocks and options related.

---------------------------------------------------------------------------------------------------------------

As you know in the Think or Swim platform you can generate a buy order by clicking on the asking price and a sell order by clicking on the bidding price. Because this is going to be a Stop Sell order you have to click on the bid. As soon as you click there you will see appearing a sell order down on the “Order Entry Tool”. Here you can change anything about your order details. If you look carefully at the “Order Entry Tool” you will see the “Order” menu on the left side of your order. As default it is a Limit Order. If you click and open that menu you will see the following different types of orders you can choose from: Market, Limit, Stop, StopLimit, TrailStop, TrailStopLimit, MOC, LOC.

Free Tutorials - Stocks, Options and ThinkorSwim. Click Here.

In the next GroWithYou Trading Tutorial:

• How to set stop orders in Think or Swim
• How to set stopLimit orders in Think or Swim
• Bonus - Free Mini Video Tutorial

Keep learning about Stop Orders and Stop Limit Orders by going to: ThinkorSwim Tutorial - How to set Stop Orders (MKT) & StopLimit Orders (LMT).

If you have found this article helpful remember to:

- Rate it up

- Share it

- Leave a comment or question

- Add you as my follower to get my next Hubs

Not yet an HubPages Member, sign up from here: