Chapter 04 · Section 4.1
Stop Orders- Usage
Which of the following is the correct statement?
c) A stop order can be used to enter a new position and to liquidate a position.
Yes. A stop order is often used as a safety valve to close a position. It can also be used to signal an upward or downward trend. If you can identify an upward trend and open a long position when the market has gone up to 50.Continue
a) A stop order can only be used to close a position.
b) A stop order can only be used to open a new position.
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