How do you decide a Stop Limit on Stocks?

A stop limit would generally be used as a way to enter a position, like on a breakout play.
For Example:

Stock symbol XYZ is trading at $15 a share but you think if it hits $16 a share it will breakout to the upside. So in this example you would place a buy stop limit with a trigger of $16 and a limit of maybe $16.10. Once the stock trades through $16 it will place a limit order to buy you the stock at $16.10 or lower.

To exit a position, generally you would do a stop market, not a stop limit.

For example

You own symbol XYZ already at $15 a share, so you place a sell stop market at $14 to limit your loss. As soon as the stock trades down to $14, it will sell you out at the market.

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