What are stock alerts and how do you trade them?
Stock alerts tell you when might be a good time to buy or sell stocks. Here, we explain what stock alerts are and give some examples of potential buy and sell alerts.
What are stock alerts?
Stock alerts are a type of trading alert which you can set to notify you of price action, technical conditions or economic results which could affect the value of underlying stocks. There are three main types of stock alerts available with IG:
- Price alerts notify you when a market moves by a certain amount in points, or as a percentage
- Economic result alerts notify you of upcoming economic events, including central bank announcements
- Technical indicator alerts notify you when certain technical conditions are met. You can use them with various indicators, including Bollinger bands, the stochastic oscillator and the exponential moving average (EMA)
Stock market buy alerts
You can use stock market buy alerts as a trigger to open a long position – or close a short position – on a stock. You can set buy alerts to notify you if the underlying stock or asset is experiencing bullish momentum, or if a stock’s price might be about to begin an upward trend.
Stock market sell alerts
You can use stock market sell alerts as a trigger to close your long position or open a short position on a stock. You can set sell alerts to notify you if the market momentum is bearish, or that the stock’s price could be about to enter a downward trend.
Examples of stock alerts
Examples of a buy alert could be if you set up a technical alert to notify you if a stock’s 20-day exponential moving average (EMA) is greater than its 100-day EMA.
This could serve as a buy alert because during an uptrend a 100-day EMA might act as a level of support. Some traders believe that if the stock’s price hits support, it is an opportunity to enter a buy position with the assumption that it will bounce off support and climb upwards.
Examples of a stock market sell alert could include a price alert if the FTSE 100 falls in value by 2% in a single trading day. You might set up this alert if you expect the FTSE 100 to continue to fall given a wider market sell-off in the face of a 2% drop. Alternatively, you might use this alert to monitor the market and take steps to manage your risk as appropriate.
How to trade on stock alerts
- Create or log in to your live IG account
- Go to our award-winning trading platform
- Select ‘alerts’ from the menu
- Set up an alert according to your parameters
- Decide whether to open or edit a position when an alert is triggered
What to bear in mind before trading stock alerts
The most important thing to bear in mind before trading stock alerts is that while they can serve as the basis for a trade, they are not a guarantee that prices will change – nor can they show the extent of a supposed change in price.
As a result, it is important to carry out your own analysis alongside the information supplied by trading alerts to better confirm any forecasts you might have about the underlying stock or market.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
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