When you place a sell order, you can place it at market (which means that it will sell at whatever the price is at the moment the sell order is issued) Of course, if the price is dropping rapidly, there's no guarantee it'll sell at a particular price. On a normal day where the stock isn't being dumped, you'll generally get a price pretty close to the time of execution of the order. It used to be that when you would place a market order, they would delay it for a few seconds to hedge themselves in there and they would clump your order in with a bunch of others and move a large block -- and possibly nail a few extra cents per share in there from the hedge for themselves. That behavior seems to be almost gone due to many of the 8 second trade guarantees, etc.
You can place a Stop Loss order which will sell when a stock falls to a certain price. You can place a Limit which will sell a stock as it rises beyond a certain price.
My uncle works with leaps and derivatives - which are far beyond by knowledge of stocks. While I was busy making 20% on certain stocks, he was making 1200% on those same stocks -- with quite a bit more risk. (Yes, 1200%)
Researching the company you are buying into will save you untold hundreds or thousands of dollars. So many people buy a company based on a tip from a friend -- only to find out that the company they invested in was not quite where they should be, not quite where they wanted to be, didn't quite get that approval they were looking for, missed getting that favorable ruling, etc.
My methods are pretty simple for picking stocks. If the company isn't making money or isn't close to profitability, they are immediately erased from the list. If they aren't widely traded, I will generally pass it by -- no headaches when I decide to liquidate a position if there aren't enough daily transactions to buy it. I look for positive indicators, generally looking for companies that appear to be undervalued. I also have another off-the-wall theory that I use for investing, and one day when I get the time, I'll have to dredge up my old analysis program that I wrote.
Zacks.com has a quick weekly 'hotlist' of stocks to buy/sell. Validea.com used to have some interesting stuff. fool.com is aptly named -- their 'gorilla' portfolio lagged the broader market considerably, yet, they are still looked upon as investing gurus. There is some validity to their methods, they just didn't do enough homework -- or expected that they had enough sway to push the market.
A lot of their thoughts are pretty general and fall along the same lines as mine. I rarely will buy the #1 company in an industry. If they are #1, they might lack some energy to keep growing at a fast clip. The #2 and #3 companies are often times more aggressive and more profitable so that they can become #1 one day.
I have missed opportunities that I wish I had taken... Google at $84 was one.
Overall, I spend less than two hours per quarter doing hard analysis and casually glance over the financials once in a while to make sure my current picks are still going in the right direction. I'm in it for the long haul, so, time is on my side there. I'm certainly not a day trader, and hold some stock that I should have sold long ago, but, I feel that the company will recover in 3-5 years to regain my investment back. A stop loss order here would have probably saved a bit of hair.
Investing in stock isn't really difficult -- and dollar cost averaging is the way to go. Timing the market rarely works and day trading requires time and nerves of steel. Again, if you aren't looking to pick your individual stocks, and are looking to just diversify your holdings beyond CDs and passbook savings, and you want to do automatic deposits, then, a mutual fund might be a better vehicle.
If you want to spend the time researching companies and finding the ones that appear to be good values that have growth capability and like to read balance sheets and news articles and mull through all the junk to make a decision, then, try one of the online brokers. If you're really looking to just play with it, buyandhold.com is pretty inexpensive for 2 trades a month ($6/month I think) and you can get the feel of it pretty inexpensively.
There used to be a company -- and I don't recall it offhand -- but, they allowed you to create your own mutual fund from stocks that you chose. You would invest and it would buy shares on your behalf in those stocks based on the allocation that you gave it.
So, you could say, MCD 15%, BAC 35%, CVX 25%, KO 25%, and when you did your monthly deposit of say $500, it would buy shares and fractional shares of your picks based on the allocation %. An easy way to diversify your holdings.
Another reason for mutual funds is that they usually lump a bunch of stocks together, so, you lose some of the volatility that you get on a single stock purchase. If you invest in MCD and it drops 4% in one day, that's a bit harder to stomach than if MCD dropped 4% and BAC rose 3% and negated each other.