Always use a stop loss.
This is the most basic of order types and is used to exit (or
enter) a market at a price that is worse for the trader than the
price that is currently available.
An example of a stop is if we buy £10 a point of FTSE
on a spread bet at the current price offered of say, 5600, and
leave a stop loss at 5550. This means our exit or closing
trade will be at 5550 if the market falls to that level, resulting
in a 50 point loss (or £500, 50 points multiplied by £10 per
It is also possible to leave a stop entry order. In the example
above where the current price is 5100 a stop entry order could
be placed to buy £10 per point if the market trades at a price of
5125. Our opening trade will only be executed if the market rises
to this level.
Stop entry orders are often used by technical traders who are
keen to ensure a trend or chart pattern is fully established before
initiating a new trade.