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Do you plan to buy this stock or short sell it? |
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See the section on money management below. There is a method for the number of shares you pick and you need to follow that method for every trade. |
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This is the price at which you intend to initiate this trade. It must be precise and chosen for a good reason. |
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This is how far you will chase the stock if you cannot get it at your exact entry price. For example, if your entry price to buy DELL is 48 1/2 and your slippage is 5/8, you would be willing to pay as much as 49 1/8 to get into this trade. |
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Your slippage may be set based on the spread in the particular stock, the average daily trading range of the stock, your risk parameters, or your knowledge about how this stock generally trades. In any event, slippage is a number, and you will not exceed this number. |
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Initial Protective Stop (IPS) |
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This is where you will get out of this trade if it is moving against you. This is where you establish how much risk you intend to take in this trade. See the section on risk management below. |
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This is only a target. See the section on exit strategies below. |
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What about the execution of the trade itself? |
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