Alerts can Warn of Dangers or Opportunities
In ancient times, there were places along the city wall where men were stationed to watch for anyone approaching the city. If those approaching were identified as foes, an alert could be sounded. Even today, our SimpliSafe system alerts us when doors are opened and when the alarm system is enabled or disabled. Most of us have smoke detectors to alert us to a fire. We install software on our computers to alert us to fraud and viruses. The alerts we receive are endless.
In the same way, alerts can be helpful for an investor. I have grown more adept at using alerts and think you might want to use them as well.
Why Use Fidelity Price Alerts
The primary reasons for using price alerts are twofold. The first is to inform me of significant price movement on any of our investments I am monitoring. I find it helpful to know if an investment has gone up dramatically or down significantly. For example, if the investment has gone down, I may want to buy more shares at a reduced price. If it has gone up, I might want to sell some. Now the reasons for buying and selling vary, so I don’t regularly buy or sell. But there are times when, after some brief research I do one or the other.
The second reason is to monitor investments that I might want to buy. If, for example, I am watching an ETF that I believe may come down in price, I can set an alert to inform me when and if it does. For the most part, I want the alerts to come to me via email. However, they can be sent via text message or to Fidelity’s Active Trader Pro software.
Setting Up Sensible Alerts
To keep my alert maintenance to a minimum, I choose values that will not trigger every day. For example, setting an alert for a 1.0% price change is a waste of time. In a volatile market, 1% changes are common. I have found 2.5% is the lowest appropriate value, but for some investments 4-5% is more sensible. Tesla, for example, often swings up or down by 4-5%.
The Steps to Create a Price Alert
The steps are shown on the following screen images. First of all, recognize that Price Triggers are just one type of alert in the “Research and Market Monitoring” categories.
Secondly, you can navigate to this area of the Fidelity web site by clicking on “News & Research”, then “Alerts” and then on “Price Triggers.”
On the “Alert Setup” tab you can quickly see the types of alerts you might want to use by clicking in the “Event Trigger” dialog box.
On the fourth screen, I illustrate one of the alerts I have for NEWT. In any given day, if the price of NEWT shares drops 2.5% or increases by 2.5%, I will receive an alert to my email. I will also receive a separate email if there is a new 52-week high or low reached. If the alert is triggered, at the close of the market day I can just go into “Expired Alerts” and reactivate them with two clicks.
If you want multiple alerts on the same ETF or stock, simply click on the “set up a trigger events for multiple securities.”
Finally, choose your triggers and appropriate values. For some alerts there are no values because the triggers are based on movement or high/low price activity.
I don’t spend my day looking at prices for multiple investments. Rather, I let Fidelity tell me when there is something I might want to review. If there is a SimpliSafe alarm, I want to know about it. If there are big things happening with an investment, I also want to know that.