When Exiting a Position, Prefer Trailing Stops

Sometimes I read or hear negative news or an opinion about a particular stock that makes me decide to exit my position, hoping to do so before the general market gets the same sentiment and sends the stock price crashing. Now, I've made the mistake of using a limit order, and find that the price I set was too low, because the stock price continues to rise, often significantly. I regret all the opportunity loss. 

Unless the stock is crashing before your eyes, it's better to use a trailing stop. That way if the stock price continues to rise, you can still take advantage of the rise. Depending on how much at risk I think the price is of crashing, I usually set the trail stop between 0.5% to 2%; 0.5% if I think the stock can crash immediately, 2% if I think it still has a few days or weeks to rise. If it's a large position, I'll set multiple trail stops at different percentages.

Of course, if it's crashing before your eyes or the news you heard/read is very serious, use a market or limit order.