Page 1116 - How to Make Money in Stocks Trilogy

102 HOW TO MAKE MONEY IN STOCKS—GETTING STARTED

Busy During the Day?
Set Automatic Trade Triggers

If you work during the day and can’t watch the market, you can set “condi-
tional orders” ahead of time with your broker.
It can be a great way to catch a big breakout—even as you’re plugging
away at your day job. And when you’re on vacation and can’t watch your
stocks closely, you also can set conditional sell orders to lock in your gains or
cut short any losses if the stock declines.
Important: Talk with your broker before placing a conditional
order for the first time. Certain brokers have different ways of setting up
these types of trades.
For example, some allow you to set them up based on both price and vol-
ume, so you can make sure institutional investors are buying heavily as the
stock breaks out.
So before you start using trade triggers, call your brokerage service, tell
them what your objective for the order is, and have them walk you through
the various offerings they have to meet your needs.
Here are some basic examples.

Buy Stop Orders
Purpose: To buy a stock as it breaks out from a proper buy point

Use a buy stop order when you want to buy a stock, but only after it climbs
higher and hits a certain price.
Let’s say you find a stock on the IBD 50 that passes the Buying Checklist
and is near a potential buy point of $30. But right now, it’s trading at $29.50.
On Saturday or Sunday, after you’ve done your research and set your
game plan using the Simple Weekend Routine, you could log in to your
online broker’s website and set a buy stop order for $30.
If a few days or weeks later the stock hits the target $30 share price, your
trade will get triggered automatically. (You can set an expiration date for
your conditional order: If it doesn’t get triggered within that time frame, the
order is cancelled.)