The following suggestions are just that, suggestions you may have or may not have heard before. The hope is there is something here to help your trading. Check out the short 5 minute video to get an idea for placing Stop Loss Orders.

Stop Loss Video

Position size: Determine the dollar amount you are willing to lose before every trade. Minus the price of the stock from the stop loss price. Use that number to determine the amount of shares to buy so as not to exceed the dollar amount you are willing to lose if stopped out. 

Stock Gaps: Stocks will sometimes gap or have an excessive move out of a well defined pattern. The following guidelines can be used to determine if a gap or price is too excessive from the previous days close.

A) Stock price is $10.00 or less, consider $0.26 excessive.

B) Price is between $10 and $20.00, consider $0.41 excessive.

C) Price is between $20 and $30.00, consider $0.66 excessive.

D) Price is between $30 and $50.00, consider $1.01 excessive.

E) Price is between $50 and $75.00, consider $1.56 excessive.

F) Price is $75.00 or more, consider $1.86 excessive. 

Price Targets: If you are trading from the Daily Break Out lists, I recommended selling half of your position at the first target. When two targets are listed, then I recommended selling at least half of your remaining position at the second target. You might use a trailing stop on the remaining shares, until they are stopped out completing the trade.

Market Phase: It is important to understand there are four basic phases to the stock market. It is also important to know what phase the market is currently in, simply because it's easier to trade with the trend then against it.

Stock Market Phases: A Bottom, An Up-Trend, A Top, and A Down-Trend into a Bottom completing the cycle.

Bottom: This occurs after the market has dropped, and panic selling has subsided. The smart money managers and experienced traders begin to buy, figuring that the worst is over. General market sentiment is still bearish, but overall market sentiment begins to switch from negative to neutral.

Up Trend: At this stage, the market can move off its bottom rapidly as short sellers cover their positions. The early majority of buyers in this group are usually technicians who, seeing that the market is putting in higher lows and higher highs, recognize that market direction and sentiment have changed. Sentiment can move from neutral to bullish to sometimes euphoric during this phase, as buyers scramble to get in on the easy money.

Top: In the third phase of the market cycle, sellers begin to dominate. This part of the cycle is identified by a period in which the bullish sentiment of the previous phase turns into a mixed sentiment. Prices can often stay locked in a trading range that can last a few weeks or even months. Valuations can become extreme in many issues and value investors have long been sitting on the sidelines. Those who got into the market late in the uptrend are unable to sell for a profit, settle for a break even or a small loss.

Down Trend: The fourth and final phase in the cycle is the most painful for those who still hold positions. Many hang on because their investment has fallen below what they paid for it. It is only when the market has plunged dramatically that the laggards, many of whom bought during the late up trend or top give up, capitulate, and finally sell. It is at this point the new investors, or professionals who will buy the depreciated stocks and enjoy the next up trend.

An extremely important aspect of trading is your money management plan. There will be orders that go against you in the market, it is inevitable. It is simply not possible for any trader, professional, amateur, or anyone in between to avoid all losses. Knowing ahead of time there will be losses, but having a management plan in place will not only keep you financially in the game but will keep you emotionally in the game.

The following definitions are copied directly from Scottrade’s Website 

Market Order: A Market Order is an order to buy or sell a stock immediately at the best available current price; no price can be specified in this order. This order guarantees execution, but does not guarantee execution price. Be wary of using market orders on stocks with a low average daily volume: in such market conditions the ask price can be a lot higher than the current market price (resulting in a large spread). In other words, you may end up paying a whole lot more than you originally anticipated. It is much safer to use a market order on high-volume stocks versus low-volume stocks.

• Buy market orders are executed generally at the ASK price
• Sell market orders are executed generally at the BID price

Market Orders cannot contain special instructions such as All or None (AON) or Good until Cancelled. Again, there is no guarantee of the execution price and it can be several points higher or lower than the quoted bid/ask, especially during fast markets.

Limit Order: This is an order to buy or sell a set number of shares at a specified price or better. A Limit Order guarantees price, but not an execution. These types of orders also may be placed with special instructions, like AON (all or none) and GTC (good until cancelled).

• Buy limit orders - orders will execute only if the market reaches the specified price or lower.
• Sell limit orders - orders will execute only if the market reaches the specified price or higher.

For Listed (NYSE, AMEX, etc.) and Nasdaq stocks

• Limit prices may include up to two decimal places for Stocks above $1.00
• Limit prices may include up to four decimal places for Stocks under $1.00

A Stop Order: Stop orders are an order to buy or sell a security when its price surpasses a particular point, limiting the investor's loss or locking in his or her profit. Once the market price surpasses the predefined entry/exit point, the stop order becomes a market order, and is then handled as defined under the definition of a market order. This type of order is also referred to as a "stop-loss order". These types of orders also may be placed with special instructions, like AON (all or none) and GTC (good until cancelled). Stops are not a definite guarantee of getting the desired entry/exit points. For instance, if a stock gaps down then the trader's stop order will be triggered (or filled) at a price significantly lower than expected.

• Buy Stop Orders - The stop price is set above the current ASK price
• Sell Stop Orders - The stop price is set below the current BID price
• Depending on market conditions, once the order is triggered, there is no guarantee of the execution price and the price received may be several points away from the stop price.

A Stop Limit Order: This is a type of order that combines the features of stop order with those of a limit order. A stop-limit order will be executed at a specified price (or better) after a given stop price has been reached. Once the stop price is reached by the market, the stop-limit order becomes a limit order to buy (or sell) at the limit price or better. This order is then handled as defined by a limit order. The primary purpose of a stop-limit order is to give the trader more control over where the order should be filled. The downside, as with all limit orders, is that the trade will not be executed if the stock does not reach the limit price. These types of orders also may be placed with special instructions, like AON (all or none) and GTC (good until cancelled). Stop limit orders are used by some investors to buy a stock when it reaches a certain price, allowing the investor to buy when the stock has upward momentum behind it.

The following explanations and definitions are taken directly from the Scottrade web site.

Stop Orders: Stop orders are an order to buy or sell a security when its price surpasses a particular point, limiting the investor's loss or locking in his or her profit. Once the market price surpasses the predefined entry/exit point, the stop order becomes a market order, and is then handled as defined under the definition of a market order.

This type of order is also referred to as a "stop-loss order". These types of orders also may NOT be placed with AON (all or none), but CAN be placed as GTC (good until cancelled) or GTD (good til date).

Stops are not a definite guarantee of getting the desired entry/exit points. For instance, if a stock gaps down then the trader's stop order will be triggered (or filled) at a price significantly lower than expected.

• Buy Stop Orders - The stop price is set above the current ASK price
• Sell Stop Orders - The stop price is set below the current BID price
• Depending on market conditions, once the order is triggered, there is no guarantee of the execution price and the price received may be several points away from the stop price.

Stop Limit Orders: This is a type of order that combines the features of stop order with those of a limit order. A stop-limit order will be executed at a specified price (or better) after a given stop price has been reached. Once the stop price is reached by the market, the stop-limit order becomes a limit order to buy (or sell) at the limit price or better. This order is then handled as defined by a limit order.
The primary purpose of a stop-limit order is to give the trader more control over where the order should be filled. The downside, as with all limit orders, is that the trade will not be executed if the stock does not reach the limit price.  These types of orders also may be placed with special instructions, like GTC (good until cancelled) and GTD (good til date).

Stop limit orders are used by some investors to buy a stock when it reaches a certain price, allowing the investor to buy when the stock has upward momentum behind it.

Buy Stop Limit Orders must be placed at least 10 cents above the current ASK.

Sell Stop Limit Orders must be placed at least 10 cents below the current BID.

Trailing Stop Order: This is a complex stop order in which the stop price is set at a fixed percentage or dollar amount above or below the market price. If the market price rises, the stop price rises proportionately, but if the stock price falls, the stop loss price doesn’t change. A Trailing Stop is a Stop Order that is set at an amount below (for a long position) and above (for a short position) the market price. The amount is automatically adjusted as the price of the security fluctuates.
The Trailing Stop order is designed to let the price of a stock go up indefinitely (in the case of a long position) and close the position when the price falls a set amount, potentially protecting the client from losing profits.  Trailing Stops can be entered as a sell to protect the downside of a long position, or as a buy to protect a short position. 
General Requirements:

• Only on Equities trading over $1.00 per share – NO Penny Stocks or Pink Sheets
• Only for the Regular Trading Session, does not cover the Extended Hours
• Orders will be adjusted for cash dividends
• You may place GTC (good until cancelled) instructions

Trailing Stop Amount Requirements:
Points – The dollar spread between the current market price and the order trigger price, which is entered in the “trailing stop amount field”

• 1 point = $1.00
• Points entered may be in one-cent increments
• The minimum point spread that can be set is .01; meaning 1 cent
• The maximum point spread allowed  is an amount equal to the stock’s price

Percent – The percent spread between the current market price and the order trigger price, which is entered in the “trailing stop amount field”

• Percent amounts may be entered in 1% increments
• The minimum percent spread that can be set is 1%
• The maximum percent spread that can be set is 99%

Note: Do not translate and enter the percent in decimal format. Enter 1 for 1%; do not enter .01 for 1% 

A word of caution: A considerable number of brokers calculate trailing stops on the last close and do not adjust throughout the trading session. Consider a stock that runs up from $20.00 to $28.00 during a single session and then retreats back and closes at $21.00, you will not be stopped out with a 5% trailing stop calculated on this basis, because price is still above yesterday's high, even though it has fallen 25% intra-day. Check with your broker about how  trailing stops are calculated.