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Trade over 3,000 mutual funds, commission free! Disnat charges no commissions for buys or sells of these funds (There are a few exceptions. See our fees and commissions schedule for details.) For a complete list of the funds we offer, please see this link. |
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a decision using our Mutual Fund Center. Take advantage of advanced screening tools as well as complete access to Morningstar's respected articles, Quicktake reports, research and analysis. When you've made your decision, place your trades online or call one of our experienced representatives for assistance.
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Until now, powerful trading tools like virtual trailing stop orders (VTSOs) have only been available for futures trading or through professional equity trading software. This incredibly useful tool follows the price of a stock using a price spread rather than a fixed stop price. In the case of a trailing stop-loss (for a long position), a sell order would be triggered only if the price of the stock declined below the trailing stop spread you set. If the stock goes up, the trigger price moves up with it. However, if it declines, the trigger price remains unchanged until it is breached. At that time a sell order is sent to the market.
Below is a numeric example. The stock starts off at $10 and a $1 trailing stop sell is entered. Note how the trigger price (red line) follows the stock price (blue line) so that the difference between the two is never greater than $1. When the stock price moves up so does the trigger, as in periods 7 to 8 and 15 to 19. When the stock price declines, as in periods 4, 8 to 11, or 19 to 25, the trigger price stays put until breached, as in period 23.
Trailing stop orders are a great way to limit your downside while allowing profits to run, without having to constantly monitor prices for a pullback.
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