I generally do not recommend stop losses because I prefer to maintain control of the decision to sell rather than have a limit order in place that could execute automatically. I just like to be able to consider a variety of factors like fundamentals, technical analysis, recent news, etc. Stop losses can sometimes help get you out when a stock is breaking down, but they have their drawbacks as well. First, as you may know, there is also no guarantee that you’ll get your price. For example, if news comes out overnight that knocks a stock down, it could easily open the next morning well below where you set your limit. And second, a limit order can trigger in a downdraft, which could then be followed by some kind of bounce.

That said, I always tell investors they need to be comfortable with their investments, and I certainly understand that some investors are more comfortable having stop losses in place. I encourage you to use them if that’s you. Just try to be aware of how they work so you can use them most effectively.