Okay. So the ASX is down about 2% today..
Those of you that bought stocks yesterday with a 2% stop loss in place - does that mean your stop losses are getting triggered all over the place today? If so does that not drag the market down even further, triggering more stop losses from other punters?
Okay, so if you see the DOW went down overnight say 2%, and the ASX is heading down - would it be wise to move your stop loss down a bit to say 4%. Because the last thing you want is your stop loss hit, your shares sold, you make a small loss, then your stock bounces up again tomorrow along with the ASX as a whole.
The reasoning I have is that the market's general feel may not reflect "investors" opinions of your stock. Your stop loss is there to protect you from your stock plummeting (say on release of poor results or poor drilling results), the market itself rarely plummets more than 10% in a day, and if it dips 2% and affects your stock that much it should be no reason to sell your stock.
Stop losses are there to protect you from your company plummeting not the ASX dipping - is that right?