Summarize the following:
A stop-loss order sells your stocks if they reach a certain low point. This can help you minimize your losses if a stock starts to tank. When you buy your stocks, set your stop-loss at the lowest you're willing to let the stock price go. With a stop-loss, you will lose money. However, it might prevent you from losing big. A limit order lets you set a price limit for how much you'll pay for a stock or the lowest price you'll sell your stock for. This lets you get the best price possible for your stocks. Since the stock market can vary, it's best to always use limit orders. For instance, you can set a limit order that says you'll only pay $30 for a stock. That means your purchase wouldn't go through if the stock suddenly went up to $45. You might think that you've stumbled across a great stock that can earn you a lot of money, so you starting bidding on it. After a little while, you find that your order isn't filled because the price went up. So, you increase your bid. That's called "chasing" the stock and should generally be avoided. Remember, the name of the game is to buy stocks at the right price, not chase them around just to get an order filled. Although you will never fully figure out the stock market, you may be able to minimize losses by changing your trading strategy. However, plan these changes in advance. For instance, you might decide to switch from a momentum strategy to a fading strategy if your stocks are losing value unexpectedly. While you don't want to switch strategies any time your stocks are losing money, you may want to adjust if the market changes. Remember, alter your strategy based on underlying changes in the markets, not because of emotion or fear of loss. If market volatility increases, that's a good reason to adapt your strategy to new market forces. However, if you change your strategy just because you took an unexpected loss, that's a bad reason to change your trading philosophy.
Use a stop-loss with every order. Use limit orders to maximize profits. Avoid "chasing" stocks. Adapt your trading strategy if the market changes.