I am new to trading and have been looking every where trying to find clear, understandable definitions of purchasing and selling terms. These are really basic but of the most extreme importance of knowing. I have found no reference in the Zecco education section nor in these forums. Have also been to The Motley Fool School, Stockfetcher and several other places looking to find the definition and examples to these terms:
Order to Buy as a Stop loss order, also as an order to sell as a stop loss order
Order to Buy as a Stop limit order, also as an order to sell as a stop limit order
Orders to buy or sell as a Limit order
Orders to buy or sell as a Stop order
The definition Zecco has for "stop" order is indeciferable and makes no sense. (directly quoted from Zecco trading education), "enter an order to buy 100 shares of XYZ corp. at $85, stop. The stock must be trading below that level ($85?) currently, but if it reaches $85 the stop order will buy 100 shares at the market price." Why would any one want to place an $85 stop order for a stock that currently trades at say $80 per share? Why wouldn't you place the order at ($80) and reap the rewards of a $5 increase? Waiting till a stock reaches a price to buy seems like a way to surely loose most of the time. Seems you should sell when it "reaches" up and buy when it "falls".
Please help me to understand for I have some Dendreon I want to sell if it falls to a certain low. And I don't want to put in the wrong type of order only to chalk it up to not knowing the correct terminology or how to apply its use when placing orders.
Thanks very much.
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