Order Types


It is highly important to know your stop loss while in a trade. Stop losses help traders cut their losses short and avoid further loss while the stock keeps dropping. 

The biggest question for traders is whether to use a stop loss order or a limit sell order. Each of these choices comes with a risk, the risk of using a stop loss order is that you don't give the stock any wiggle room to fluctuate and possibly recover from the drop. The risk of a limit sell order is your order may never get fulfilled if the stock falls below the desired price and keeps falling. For the purpose of day trading penny stocks (buying and selling within the same day), its a good idea to stick to stop losses because penny stocks move quickly and if they break a support then they'll likely keep falling.