The stop loss function in the portfolio display is primarily designed to alert you falling stock prices and give you an early bail out signal This function can also be used to monitor buying situations.
To use this function you will need to have a client portfolio active in the main Analyst window. Right-click on the active portfolio and select 'stop loss' from the popup menu.
The stop loss dialog box will be displayed.
Percentage: Set the moving stop loss percentage to be used. 10% is an average figure.
Direction:'Long' is the normal selection. Use 'short' only for monitoring buying situations.
Starting date:This is the starting date for the stop loss calculation. Use the share purchase date or today's date. Press ok to accept the values entered.
Stop loss - portfolio display interpretation
Stop loss will be displayed in your portfolio provided that the report layout includes this column. The values shown in this column for a 10% stop loss (long) will be:
10% (or more)if the price is at or above the highest price since the starting date (see above)
0-10%if the price curve is above the stop loss but below the highest value since the starting date.
Less than 0%if the stop loss has been breached. Time to sell?
If the stop loss is showing more than the chosen percentage (in this case 10%) at the end of the day, the rolling stop loss will be recalculated at the start of the following day. This will reset the stop loss displayed in your portfolio to 10%.
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